10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38441

ChampionX Corporation

(Exact name of registrant as specified in its charter)

Delaware		82-3066826
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2445 Technology Forest Blvd,	Building 4, 12th Floor
The Woodlands,	Texas	77381
(Address of principal executive offices)		(Zip Code)

(281) 403-5772

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	CHX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The registrant had 197,973,797 shares of common stock, $0.01 par value, outstanding as of April 20, 2023.

CHAMPIONX CORPORATION

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Executive Overview and Business Outlook	18
	Consolidated Results of Operations	19
	Segment Results of Operations	20
	Capital Resources and Liquidity	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
SIGNATURES		26

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, contained in this report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words “believe,” “anticipate,” “expect,” “may,” “intend,” “foresee,” “guidance,” “estimate,” “potential,” “outlook,” “plan,” “should,” “would,” “could,” “target,” “forecast” and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking statements. Forward-looking statements are based on our current expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.

All of our forward-looking statements involve risks, uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to materially differ from our historical experience and our present expectations or projections. Known material factors that could cause actual results to materially differ from those contemplated in the forward-looking statements are those set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, including the following:

•Demand for, and profitability of our products and services, is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets;

•Cost inflation and availability of raw materials;

•The impact of inflation on wholesale product costs, labor rates, transportation costs, and on our customers’ financial position and ability to purchase our products;

•Global economic conditions, inflation, geopolitical issues, supply chain disruptions, and availability and cost of credit, and its impact on our operations and those of our customers and suppliers;

•Our ability to successfully compete with other companies in our industry;

•Our ability to develop and implement or introduce new technologies, products, and services, as well as our ability to protect and maintain intellectual property assets;

•Our ability to successfully execute potential acquisitions and integrate acquired businesses;

•Potential liabilities arising out of the installation or use of our products or from a chemical spill or release;

•Continuing consolidation within our customers’ industry;

•Credit risks related to our customer base or the loss of significant customers;

•A failure of our information technology infrastructure or any significant breach of security;

•Risks relating to our existing international operations and expansion into new geographical markets;

•Risks relating to improper conduct by any of our employees, agents or business partners;

•Failure to attract, retain and develop personnel;

•The impact of natural disasters and other unusual weather conditions on our business;

•Investor sentiment towards companies in the oil and gas industry due to climate change, fossil fuels and other environmental, social and governance matters;

•Changes in domestic and foreign governmental public policies and actions of governments that impact oil and gas operations or favor renewable energy projects, risks associated with entry into emerging markets, changes in statutory tax rates and unanticipated outcomes with respect to tax audits;

•Disruptions in the political, regulatory, economic and social conditions of the countries in which we conduct business;

•Fluctuations in currency markets worldwide and disruptions in capital and credit markets;

•The impact of our indebtedness on our financial position and operating flexibility;

•Disruptions in the capital and credit markets;

•The impact of war, terrorism and civil unrest;

•Changes in federal, state and local legislation and regulations relating to oil and gas development and the potential for related litigation or restrictions on our customers;

•Changes in environmental and health and safety laws and regulations which may increase our costs, limit the demand for our products and services or restrict our operations; and

•The impact of tariffs and other trade measures on our business.

We wish to caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update, revise or correct any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required under the federal securities laws.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
(in thousands, except per share data)	2023		2022
Revenue:
Product revenue	$	833,023	$	750,668
Service revenue	93,245		96,394
Lease and other revenue	22,079		18,898
Total revenue	948,347		865,960
Cost of goods and services	664,992		658,350
Gross profit	283,355		207,610
Costs and expenses:
Selling, general and administrative expense	160,816		150,360
Loss on disposal group	12,965		—
Interest expense, net	12,466		11,363
Other expense, net	5,295		1,320
Income before income taxes	91,813		44,567
Provision for income taxes	28,669		6,394
Net income	63,144		38,173
Net income (loss) attributable to noncontrolling interest	(388)		1,471
Net income attributable to ChampionX	$	63,532	$	36,702
Earnings per share attributable to ChampionX:
Basic	$	0.32	$	0.18
Diluted	$	0.31	$	0.18
Weighted-average shares outstanding:
Basic	198,286		203,079
Diluted	202,440		208,850

The accompanying notes are an integral part of the condensed consolidated financial statements.

1

CHAMPIONX CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
(in thousands)	2023		2022
Net income	$	63,144	$	38,173
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(10,676)		(1,565)
Cash flow hedges	(4,689)		(1,299)
Defined pension and other post-retirement benefits adjustments, net	53		69
Other comprehensive loss	(15,312)		(2,795)
Comprehensive income	47,832		35,378
Less: Comprehensive income (loss) attributable to noncontrolling interest	(388)		1,471
Comprehensive income attributable to ChampionX	$	48,220	$	33,907

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)	March 31, 2023		December 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	247,996	$	250,187
Receivables, net	539,380		601,061
Inventories, net	591,788		542,543
Assets held for sale	15,316		29,334
Prepaid expenses and other current assets	74,018		75,456
Total current assets	1,468,498		1,498,581
Property, plant, and equipment, net of accumulated depreciation of $717,383 in 2023 and $693,226 in 2022	739,853		734,810
Goodwill	666,689		679,488
Intangible assets, net	286,888		305,010
Operating lease right-of-use assets	89,344		92,928
Other non-current assets	76,064		76,666
Total assets	$	3,327,336	$	3,387,483
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	6,250	$	6,250
Accounts payable	539,166		469,566
Accrued compensation and employee benefits	61,535		102,750
Current portion of operating lease liabilities	27,396		28,838
Accrued distributor fees	67,096		102,034
Liabilities held for sale	—		7,186
Accrued expenses and other current liabilities	139,564		142,352
Total current liabilities	841,007		858,976
Long-term debt	595,938		621,702
Deferred income taxes	84,551		94,235
Operating lease liabilities	57,247		59,686
Other long-term liabilities	78,424		75,669
Total liabilities	1,657,167		1,710,268
Stockholders’ equity:
Common stock (2.5 billion shares authorized, $0.01 par value) 198.0 million shares and 198.5 million shares issued and outstanding in 2023 and 2022, respectively	1,980		1,985
Capital in excess of par value of common stock	2,238,027		2,249,698
Accumulated deficit	(506,458)		(527,603)
Accumulated other comprehensive loss	(44,842)		(29,530)
ChampionX stockholders’ equity	1,688,707		1,694,550
Noncontrolling interest	(18,538)		(17,335)
Total equity	1,670,169		1,677,215
Total liabilities and equity	$	3,327,336	$	3,387,483

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Stock
(in thousands)	Shares	Par Value		Capital in Excess of Par Value		Accum. Deficit		Accum. Other Comp. Loss		Non-controlling Interest		Total
December 31, 2022	198,466	$	1,985	$	2,249,698	$	(527,603)	$	(29,530)	$	(17,335)	$	1,677,215
Net income	—	—		—		63,532		—		(388)		63,144
Other comprehensive loss	—	—		—		—		(15,312)		—		(15,312)
Stock-based compensation	327	3		5,231		—		—		—		5,234
Stock options exercised	481	5		3,009		—		—		—		3,014
Taxes withheld on issuance of stock-based awards	—	—		(5,100)		—		—		—		(5,100)
Dividends declared to common stockholders ($0.085 per share)	—	—		—		(16,784)		—		—		(16,784)
Repurchase and cancellation of common stock	(1,302)	(13)		(14,811)		(25,603)		—		—		(40,427)
Distributions to noncontrolling interest	—	—		—		—		—		(823)		(823)
Cumulative translation adjustments	—	—		—		—		—		8		8
March 31, 2023	197,972	$	1,980	$	2,238,027	$	(506,458)	$	(44,842)	$	(18,538)	$	1,670,169

	Common Stock
(in thousands)	Shares	Par Value		Capital in Excess of Par Value		Accum. Deficit		Accum. Other Comp. Loss		Non-controlling Interest		Total
December 31, 2021	202,866	$	2,029	$	2,315,399	$	(525,158)	$	(21,625)	$	(16,338)	$	1,754,307
Net income	—	—		—		36,702		—		1,471		38,173
Other comprehensive loss	—	—		—		—		(2,795)		—		(2,795)
Stock-based compensation	290	3		4,725		—		—		—		4,728
Stock options exercised	189	1		1,054		—		—		—		1,055
Taxes withheld on issuance of stock-based awards	—	—		(2,639)		—		—		—		(2,639)
Dividends declared to common stockholders ($0.075 per share)	—	—		—		(15,465)		—		—		(15,465)
Cumulative translation adjustments	—	—		—		—		—		208		208
March 31, 2022	203,345	$	2,033	$	2,318,539	$	(503,921)	$	(24,420)	$	(14,659)	$	1,777,572

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
(in thousands)	2023		2022
Cash flows from operating activities:
Net income	$	63,144	$	38,173
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	56,710		57,699
Loss on disposal group	12,965		—
Stock-based compensation	5,234		4,728
Provision for inventory obsolescence and write-downs	9,966		3,988
Deferred income taxes	(8,441)		(7,788)
(Gain) loss on disposal of fixed assets	(534)		(5,070)
Amortization of deferred loan costs and accretion of discount	1,014		828
Other	1,512		612
Changes in operating assets and liabilities (net of effects of foreign exchange):
Receivables	62,673		(73,262)
Inventories	(63,139)		(81,283)
Prepaid expenses and other current assets	(2,060)		6,647
Accounts payable	40,708		27,184
Accrued compensation and employee benefits	(42,025)		(38,174)
Accrued expenses and other liabilities	(39,051)		28,746
Leased assets	(9,830)		(5,265)
Other	3,532		(888)
Net cash flows provided by (used in) operating activities	92,378		(43,125)
Cash flows from investing activities:
Capital expenditures	(26,530)		(30,597)
Proceeds from sale of fixed assets	3,505		12,731
Acquisitions, net of cash acquired	—		(3,198)
Net cash used for investing activities	(23,025)		(21,064)
Cash flows from financing activities:
Repayment of long-term debt	(26,563)		(6,713)
Repurchases of common stock	(40,428)		—
Dividends paid	(15,011)		—
Payments related to taxes withheld on stock-based compensation	(5,100)		(2,639)
Payment of finance lease obligations	(1,970)		(1,501)
Distributions to noncontrolling interest	(823)		—
Proceeds from exercise of stock options	3,014		1,055
Proceeds expected to be remitted under the Accounts Receivable Facility	15,774		—
Net cash used for financing activities	(71,107)		(9,798)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(437)		(582)
Net decrease in cash and cash equivalents and restricted cash	(2,191)		(74,569)
Cash and cash equivalents and restricted cash at beginning of period	250,187		255,178
Cash and cash equivalents and restricted cash at end of period	$	247,996	$	180,609

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

CHAMPIONX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Business

ChampionX Corporation is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. Our expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well.

Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “ChampionX” mean ChampionX Corporation, together with our subsidiaries where the context requires.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of ChampionX have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair statement of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, 2023.

Significant Accounting Policies

Please refer to “Note 1–Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for the discussion of our significant accounting policies.

New Accounting Standards Issued

In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that a buyer in a supplier finance program disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

The adoption of this ASU did not have a material effect on our consolidated financial statements. See Note 15—Supply Chain Finance for information on our supplier finance programs.

6

NOTE 2—SEGMENT INFORMATION

Our reporting segments are:

•Production Chemical Technologies—provides oil and natural gas production and midstream markets with solutions to manage and control corrosion, oil and water separation, flow assurance, sour gas treatment and a host of water-related issues.

•Production & Automation Technologies—designs, manufactures, markets and services a full range of artificial lift equipment, end-to-end digital automation solutions, as well as other production equipment and asset monitoring technologies. Production & Automation Technologies’ products are sold under a collection of brands including Harbison-Fischer, Norris, Alberta Oil Tool, Oil Lift Technology, PCS Ferguson, Pro-Rod, Upco, Unbridled ESP, Norriseal-Wellmark, Quartzdyne, Spirit, Theta, Timberline and Windrock.

•Drilling Technologies—designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits under the US Synthetic brand.

•Reservoir Chemical Technologies—manufactures specialty products that support well stimulation, construction (including drilling and cementing) and remediation needs in the oil and natural gas industry.

We refer to our Production Chemical Technologies segment and our Reservoir Chemical Technologies segment collectively as our Chemical Technologies business. Although Reservoir Chemical Technologies is not required to be disclosed separately as a reportable segment based on materiality, management believes the additional information may contribute to a better understanding of the business. Other business activities that do not meet the criteria of an operating segment have been combined into Corporate and other. Corporate and other includes (i) corporate and overhead expenses, and (ii) revenue and costs for activities that are not operating segments.

Segment revenue and segment operating profit

	Three Months Ended March 31,
(in thousands)	2023		2022
Segment revenue:
Production Chemical Technologies	$	591,684	$	514,972
Production & Automation Technologies	251,548		220,349
Drilling Technologies	56,707		56,859
Reservoir Chemical Technologies	25,806		39,900
Corporate and other (1)	22,602		33,880
Total revenue	$	948,347	$	865,960
Segment operating profit (loss):
Production Chemical Technologies	$	66,314	$	31,263
Production & Automation Technologies	34,792		24,710
Drilling Technologies	11,887		15,220
Reservoir Chemical Technologies	1,987		(3,469)
Total segment operating profit	114,980		67,724
Corporate and other (1)	10,701		11,794
Interest expense, net	12,466		11,363
Income before income taxes	$	91,813	$	44,567

_______________________

(1)    Corporate and other includes costs not directly attributable or allocated to our reporting segments such as overhead and other costs pertaining to corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply and Product Transfer Agreement with Ecolab Inc. (“Ecolab”) are included within Corporate and other.

7

NOTE 3—REVENUE

Our revenue is generated primarily from product sales. Service revenue is generated from providing services to our customers. These services include installation, repair and maintenance, laboratory and logistics services, chemical management services, troubleshooting, reporting, water treatment services, technical advisory assistance, emissions detection and monitoring, and other field services. Lease revenue is derived from rental income of leased production equipment. As our costs are shared across the various revenue categories, cost of goods sold is not tracked separately and is not discretely identifiable.

In certain geographical areas, the Company utilizes joint ventures and independent third-party distributors and sales agents to sell and market products and services. Amounts payable to independent third-party distributors and sales agents may fluctuate based on sales and timing of distributor fee payments. For services rendered by such independent third-party distributors and sales agents, the Company records the consideration received on a net basis within product revenue in our condensed consolidated statements of income. Additionally, amounts owed to distributors and sales agents are reported within accrued distributor fees within our consolidated balance sheets.

Revenue disaggregated by geography was as follows:

	Three Months Ended March 31, 2023
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other (1)		Total
United States	$	241,761	$	192,541	$	42,960	$	12,573	$	13,590	$	503,425
Latin America	124,471		4,688		—		3,968		967		134,094
Middle East & Africa	76,987		15,421		2,481		6,737		(385)		101,241
Canada	74,164		20,537		3,767		418		11		98,897
Europe	49,803		4,959		6,160		368		2,631		63,921
Asia-Pacific	9,219		2,078		1,337		1,179		5,788		19,601
Australia	5,949		11,324		—		—		—		17,273
Other	9,330		—		2		563		—		9,895
Total revenue	$	591,684	$	251,548	$	56,707	$	25,806	$	22,602	$	948,347
	Three Months Ended March 31, 2022
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other (1)		Total
United States	$	190,906	$	167,802	$	46,819	$	25,221	$	21,854	$	452,602
Latin America	99,605		5,003		—		3,590		725		108,923
Middle East & Africa	74,044		16,711		1,689		7,721		314		100,479
Canada	75,799		19,452		2,941		478		26		98,696
Europe	49,021		2,345		3,710		903		3,471		59,450
Asia-Pacific	8,483		1,671		1,675		1,045		7,490		20,364
Australia	5,843		7,275		—		108		—		13,226
Other	11,271		90		25		834		—		12,220
Total revenue	$	514,972	$	220,349	$	56,859	$	39,900	$	33,880	$	865,960

______________________

(1)    Revenues associated with sales under the Cross Supply and Product Transfer Agreement with Ecolab are included within Corporate and other.

Revenue is attributed to regions based on the location of our direct customer, which in some instances is an intermediary and not necessarily the end user.

8

Contract Balances

The beginning and ending contract asset and contract liability balances from contracts with customers were as follows:

(in thousands)	March 31, 2023		December 31, 2022
Contract assets	$	—	$	—
Contract liabilities - current	$	16,953	$	14,113

NOTE 4—INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The components of our definite- and indefinite-lived intangible assets were as follows:

	March 31, 2023						December 31, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived intangible assets:
Customer relationships	$	582,498	$	414,737	$	167,761	$	582,466	$	407,212	$	175,254
Unpatented technologies	142,760		60,989		81,771		142,760		56,264		86,496
Favorable supply agreements	57,000		53,822		3,178		57,000		49,056		7,944
Trademarks	59,857		36,949		22,908		59,856		36,048		23,808
Patents	38,190		31,726		6,464		38,175		31,481		6,694
Other	1,894		1,888		6		1,892		1,878		14
	882,199		600,111		282,088		882,149		581,939		300,210
Indefinite-lived intangible assets:
Trademarks	3,600		—		3,600		3,600		—		3,600
In-process research and development	1,200		—		1,200		1,200		—		1,200
	4,800		—		4,800		4,800		—		4,800
Total	$	886,999	$	600,111	$	286,888	$	886,949	$	581,939	$	305,010

Goodwill

The carrying amount of goodwill, including changes therein, by reportable segment is below:

(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Total
December 31, 2022	$	367,084	$	211,268	$	101,136	$	—	$	679,488
Foreign currency translation	(12,802)		3		—		—		(12,799)
March 31, 2023	$	354,282	$	211,271	$	101,136	$	—	$	666,689

Goodwill is not subject to amortization but is tested for impairment on an annual basis or more frequently if impairment indicators arise.

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NOTE 5—DEBT

Long-term debt consisted of the following:

(in thousands)	March 31, 2023		December 31, 2022
2022 Revolving Credit Facility	$	—	$	25,000
2022 Term Loan Facility	621,875		623,438
Total	621,875		648,438
Net unamortized discounts and issuance costs	(19,687)		(20,486)
Total long-term debt	602,188		627,952
Current portion of long-term debt (1)	(6,250)		(6,250)
Long-term debt, less current portion	$	595,938	$	621,702

_______________________

(1) Includes the mandatory amortization payments due within twelve months related to the 2022 Term Loan Facility as of March 31, 2023.

On June 7, 2022, we entered into a restated credit agreement, which provides for (i) a $625.0 million seven-year senior secured term loan B facility (the “2022 Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $700.0 million, of which $100.0 million is available for the issuance of letters of credit (the “2022 Revolving Credit Facility,” together with the 2022 Term Loan Facility, the “Senior Secured Credit Facility”). The full amount of the 2022 Term Loan Facility was funded, and $135.0 million of the 2022 Revolving Credit Facility was drawn, on June 7, 2022. As of March 31, 2023, we had no outstanding balance on the 2022 Revolving Credit Facility.

The 2022 Term Loan Facility matures June 7, 2029 and the 2022 Revolving Credit Facility matures June 7, 2027. The 2022 Term Loan Facility is subject to mandatory amortization payments of 1% per annum of the initial commitment paid quarterly, which began on December 30, 2022. The Senior Secured Credit Facility contains customary representations and warranties, covenants, and events of default for loan facilities of this type. We were in compliance with all covenants as of March 31, 2023.

At the Company’s election, outstanding borrowings under the Senior Secured Credit Facility will accrue interest at a per annum rate of (i) an adjusted SOFR rate plus the applicable spread or (ii) a base rate plus the applicable spread. On June 29, 2022, the Company executed a five-year amortizing floating-to-fixed interest rate swap to hedge our exposure to increases in variable interest rates on the 2022 Term Loan Facility. This interest rate swap agreement is based on a $300.0 million notional amount for the first three years, reducing to $150.0 million for years four and five. See Note 12—Derivatives and Hedging Transactions for additional information on interest rate swaps.

NOTE 6—COMMITMENTS AND CONTINGENCIES

The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters, and lawsuits. We record liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. In accordance with applicable GAAP, the Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred.

Guarantees and Indemnifications

We have provided indemnities in connection with sales of certain businesses and assets, including indemnities for environmental health and safety, tax, and employment matters. We do not have any material liabilities recorded for these indemnifications and are not aware of any claims or other information that would give rise to material payments under such indemnities.

As of March 31, 2023 and December 31, 2022, we had $71.4 million and $82.4 million, respectively, of outstanding letters of credit, surety bonds and guarantees, which expire at various dates through 2039. These financial instruments are primarily maintained as security for insurance, warranty, and other performance obligations. Generally, we would only be liable for the amount of these letters of credit, surety bonds, and guarantees in the event of default in the performance of our obligations, the probability of which we believe is remote.

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Litigation and Environmental Matters

The Company is party to various proceedings and claims incidental to its business, including matters arising under provisions relating to the protection of the environment. We review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and accrued to date, and the availability and extent of insurance coverage. We accrue a liability for legal matters that are probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 11 locations, the majority of which are in the United States (“U.S.”), and environmental liabilities have been accrued reflecting our best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. As of March 31, 2023 and December 31, 2022, environmental liability accruals related to these locations were $6.0 million and $5.9 million, respectively.

Prior to the commencement of our operations as an independent publicly traded company in 2018, groundwater contamination was discovered at the Norris Sucker Rods plant site located in Tulsa, Oklahoma (“Norris”). Initial remedial efforts were undertaken at the time of discovery of the contamination and Norris has since coordinated monitoring and remediation with the Oklahoma Department of Environmental Quality (“ODEQ”). As part of the ongoing long-term remediation process, Norris contracted an engineering and consulting firm to develop a range of possible additional remedial alternatives in order to accelerate the remediation process and associated cost estimates for the work. In October 2019, we received the firm’s preliminary remedial alternatives for consideration. We have submitted our long-term remediation plan and it was approved by ODEQ. We are now in discussion with ODEQ to finalize a consent order. Because we have not yet finalized the consent order for further remediation at the site and discussions with ODEQ remain ongoing, we cannot fully anticipate the timing, outcome or possible impact of such further remedial activities, financial or otherwise. As a result of the recommendations in the report, we accrued liabilities for these remediation efforts of approximately $2.0 million as of December 31, 2019. Liabilities could increase in the future at such time as we ultimately reach agreement with ODEQ on our remediation plan and such liabilities become probable and can be reasonably estimated; however, there have been no changes to our estimated liability as of March 31, 2023.

Matters Related to Deepwater Horizon Incident Response

On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after an explosion and fire, resulting in a massive oil spill. Certain entities that are now subsidiaries of ChampionX as a result of the acquisition of the Chemical Technologies business in 2020 (collectively the “COREXIT Defendants”) supplied COREXIT™ 9500, an oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule, which was used in the response to the spill. In connection with the provision of COREXIT™ 9500, the COREXIT Defendants were named in several lawsuits. Cases arising out of the Deepwater Horizon accident were administratively transferred and consolidated for pre-trial purposes under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 in the United States District Court in the Eastern District of Louisiana (E.D. La.) (“MDL 2179”). Claims related to the response to the oil spill were consolidated in a master complaint captioned the “B3 Master Complaint.” In 2011, Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) named the COREXIT Defendants and other unaffiliated companies as first party defendants (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against the COREXIT Defendants and other unaffiliated cross defendants. In April and June 2011, in support of its defense of the claims against it, the COREXIT Defendants filed counterclaims against the Cross Claimants. On May 18, 2012, the COREXIT Defendants filed a motion for summary judgment as to the claims in the B3 Master Complaint. On November 28, 2012, the Court granted the COREXIT Defendants’ motion and dismissed with prejudice the claims in the B3 Master Complaint asserted against the COREXIT Defendants. There currently remains one “B3” case that asserted claims against the COREXIT Defendants and that remains pending against other defendants. Because the Court’s decision was not a “final judgment” for purposes of appeal with respect to those claims, under Federal Rule of Appellate Procedure 4(a), the plaintiff will have 30 days after entry of final judgment in the case to appeal the Court’s summary judgment decision.

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The Company believes the claims asserted against the COREXIT Defendants are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, we cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation.

NOTE 7—RESTRUCTURING AND OTHER RELATED CHARGES

We approved various restructuring plans related to the consolidation of product lines and associated facility closures and workforce reductions during prior periods, which we expect to be completed during 2023. We recognized charges of $2.2 million during the three months ended March 31, 2023, consisting primarily of contract termination costs, inventory obsolescence, and employee severance and related benefits. During the three months ended March 31, 2022, we recorded restructuring and other charges of $8.5 million.

The following table presents the restructuring and other related charges by segment as classified in our condensed consolidated statements of income.

	Three Months Ended March 31,
(in thousands)	2023		2022
Segment restructuring charges (income):
Production Chemical Technologies	$	1,144	$	11,636
Production & Automation Technologies	785		(4,147)
Drilling Technologies	—		—
Reservoir Chemical Technologies	396		743
Corporate and other	(95)		252
Total	$	2,230	$	8,484
Statements of Income classification:
Cost of goods and services	$	1,531	$	(4,139)
Selling, general and administrative expense	699		12,623
Total	$	2,230	$	8,484

Our liability balance for restructuring and other related charges at March 31, 2023 reflects contract termination costs, employee severance and related benefits initiated during the period. Additional programs may be initiated during the remainder of 2023 with related restructuring charges.

The following table details our restructuring accrual activities during the three months ended March 31, 2023:

(in thousands)	Restructuring Accrual Balance
December 31, 2022	$	28,518
Restructuring charges	2,230
Asset sales and write-offs	(669)
Payments	(10,586)
Other, including foreign currency translation	(1)
March 31, 2023	$	19,492

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NOTE 8—STOCKHOLDERS' EQUITY

Dividends

On February 16, 2023, the Company announced that our Board of Directors (“Board”) approved an increase of our regular quarterly cash dividend to $0.085 per share of the Company’s common stock. Our first quarter cash dividend of $0.085 per share was declared on February 15, 2023 and is payable on April 28, 2023 to stockholders of record on April 7, 2023. As a result, we recorded a dividend payable of $17.5 million on our condensed consolidated balance sheet as of March 31, 2023. Subsequent dividend declarations, if any, including the amounts and timing of future dividends, are subject to approval by the Board and will depend on future business conditions, financial conditions, results of operations and other factors.

Repurchases

On March 7, 2022, the Company announced that our Board authorized the Company to repurchase up to $250 million of its common stock. On October 24, 2022, our Board increased the authorization under this program to $750 million. This program has no time limit and does not obligate the Company to acquire any particular amount of shares of its common stock. During the three months ended March 31, 2023, we repurchased and cancelled 1,302,499 shares of common stock at a volume-weighted average price of $30.71 per share for a total of $40.0 million, including commissions.

NOTE 9—EARNINGS PER SHARE

A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows:

	Three Months Ended March 31,
(in thousands, except per share data)	2023		2022
Net income attributable to ChampionX	$	63,532	$	36,702
Weighted-average number of shares outstanding	198,286		203,079
Dilutive effect of stock-based compensation	4,154		5,771
Total shares and dilutive securities	202,440		208,850
Earnings per share attributable to ChampionX:
Basic	$	0.32	$	0.18
Diluted	$	0.31	$	0.18

For all periods presented, the computation of diluted earnings per share excludes awards with an anti-dilutive impact. For the three months ended March 31, 2023 and March 31, 2022, the diluted shares include the dilutive impact of equity awards except for approximately 0.6 million and 0.4 million shares, respectively, that were excluded because their inclusion would be anti-dilutive.

NOTE 10—ACQUISITIONS AND DIVESTITURES

Acquisitions

On February 23, 2022, we acquired the assets of Leak Surveys, Inc., a leader in optical gas imaging technology that provides aerial and ground-based emissions leak detection to the oil and gas industry. These assets have been included in our Production & Automation Technologies segment. Under the terms of the agreement, we paid an initial amount of $3.2 million, net of cash acquired, with an additional $0.5 million which was paid on the first anniversary of the closing date. We may also be required to make future payments of up to an additional $2.5 million, contingent on the future performance of the business. As part of our purchase price allocation, we recorded goodwill of $6.3 million in the first quarter of 2022. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements.

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Divestitures

Due to the deteriorating business conditions in Russia following the Ukraine invasion and the resultant sanctions imposed by the United States, European Union, and United Kingdom, we initiated a plan to dispose of our operations in Russia (the “CT Russia Business”), which is included in our Production Chemical Technologies segment. As a result, the CT Russia Business met the criteria to be classified as held for sale during the second quarter of 2022 and we measured the carrying value of the disposal group to the lower of its carrying value or fair value less costs to sell.

We assess the fair value of the CT Russia Business (less any costs to sell) each reporting period that it remains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale.

Due to the continued deterioration of the business environment, increasing trade regulations and sanctions and Russia’s imposition of an exit tax on divestments to facilitate exit from in-country operations, we assessed the fair value less cost to sell the business as of March 31, 2023 to be zero, resulting in a $13.0 million pre-tax impairment expense recorded during the period.

NOTE 11—FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1- Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2- Inputs include observable inputs other than quoted prices in active markets.

Level 3- Inputs are unobservable inputs for which there is little or no market data available.

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows:

		Carrying Amount
(in thousands)	Measurement Level	March 31, 2023		December 31, 2022
Assets
Foreign currency forward contracts	Level 2	$	3,796	$	7,066
Interest rate swaps	Level 2	4,974		8,476
Total		$	8,770	$	15,542
Liabilities
Foreign currency forward contracts	Level 2	$	3,161	$	4,209
Interest rate swaps	Level 2	—		—
Total		$	3,161	$	4,209

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. See Note 12—Derivatives and Hedging Transactions for further discussion of gross versus net presentation of the Company’s derivatives.

The carrying amounts of cash and cash equivalents, trade receivables, and accounts payable approximate their fair value due to their short-term nature.

The fair value of our term loan facility is based on Level 2 quoted market prices for the same or similar debt instruments. The fair value of our revolving line of credit approximates carrying value due to the variable interest rates charged on the

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borrowings, which reprice frequently (Level 2). The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were:

	March 31, 2023				December 31, 2022
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2022 Revolving Credit Facility	$	—	$	—	$	25,000	$	25,000
2022 Term Loan Facility	$	621,875	$	618,766	$	623,438	$	610,969

NOTE 12—DERIVATIVES AND HEDGING TRANSACTIONS

The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company also utilizes floating-to-fixed interest rate swap agreements as cash flow hedges on certain debt to mitigate interest rate risk. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. Derivative contracts are recorded as assets and liabilities on the balance sheet at fair value. We evaluated the interest rate swap hedge effectiveness and determined it to be perfectly effective. We evaluate foreign currency forward contracts hedge effectiveness at contract inception and thereafter on a quarterly basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Changes in fair value attributable to changes in spot exchange rates for derivative contracts that have been designated as cash flow hedges are recognized in accumulated other comprehensive income (loss) (“AOCI”) and reclassified into earnings in the same period the hedged transaction affects earnings and are presented in the same income statement line as the earnings effect of the hedged item. The Company accounts for the interest rate swap agreements as a cash flow hedge, thus the effective portion of gains and losses resulting from changes in fair value are recognized in AOCI and are amortized to interest expense over the term of the respective debt. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships.

The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swaps. We monitor our exposure to credit risk by using major banks and financial institutions as counterparties and monitoring their financial condition and credit profile. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary.

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to settle with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no cash collateral had been received or pledged related to the underlying derivatives. We have elected to present our derivative balances on a gross basis on the condensed consolidated balance sheet.

The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the condensed consolidated balance sheet.

	Derivative Assets				Derivative Liabilities
(in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Prepaid expenses and other current assets	$	8,367	$	11,911	$	—	$	—
Other non-current assets	403		3,631		—		—
Accrued expenses and other current liabilities	—		—		3,161		4,209
	$	8,770	$	15,542	$	3,161	$	4,209

The following table summarizes the notional values of the Company’s outstanding derivatives:

(in thousands)	March 31, 2023		December 31, 2022
Notional value of foreign currency forward contracts and interest rate swaps	$	875,633	$	965,973

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Cash Flow Hedges

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, primarily related to inventory purchases. These forward contracts are designated as cash flow hedges. The changes in fair value of these contracts attributable to changes in spot exchange rates are recorded in AOCI until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the condensed consolidated statements of income (loss) as the underlying exposure being hedged. The forward points are marked-to-market monthly and recognized in the same line item in the condensed consolidated statements of income (loss) as the underlying exposure being hedged.

Under interest rate swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional principal amount. Any unrealized gain or loss at the time of settlement will be reclassified to interest expense, where we record the interest expense on the associated debt.

Derivatives Not Designated as Hedging Instruments

The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

Effect of Derivative Instruments on Income

The loss of all derivative instruments recognized is summarized below:

	Three Months Ended March 31,
(in thousands)	2023		2022
Loss (gain) reclassified from AOCI to income on cash flow hedges:
Cost of goods and services	$	(957)	$	71
Interest expense	(937)		—
Loss on derivatives not designated as hedging instruments:
Other (income) expense, net	1,441		4,160
Total loss of derivative instruments	$	(453)	$	4,231

NOTE 13—INVENTORIES

Inventories consisted of the following:

(in thousands)	March 31, 2023		December 31, 2022
Raw materials	$	157,717	$	142,571
Work in progress	20,615		19,582
Finished goods	501,699		467,628
	680,031		629,781
Inventory reserve	(31,801)		(24,702)
LIFO adjustments (1)	(56,442)		(62,536)
Inventories, net	$	591,788	$	542,543

_______________________

(1) Represents the amount by which the current cost of LIFO inventories exceeded their carrying value.

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NOTE 14—ACCOUNTS RECEIVABLE FACILITY

On June 28, 2022, we entered into an uncommitted accounts receivable purchase agreement (the “Accounts Receivable Facility”) with JPMorgan Chase Bank, N.A. as the purchaser. Transfers under the Accounts Receivable Facility are accounted for as sales of receivables, resulting in the receivables being derecognized from our condensed consolidated balance sheet. The purchaser assumes the credit risk at the time of sale and has the right at any time to assign or transfer (including as a participation interest) any of its rights under the purchased receivables to another bank or financial institution.

The amount available for sale under the Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of $160.0 million in receivables may be sold and remain unpaid under the Accounts Receivable Facility at any time.

Accounts receivable sold were $165.2 million for the three months ended March 31, 2023. The accounts receivable sold that remained outstanding as of March 31, 2023 was $79.4 million. During this period, cash receipts from the purchaser at the time of the sale were classified as operating activities in our condensed consolidated statement of cash flows. The difference between the carrying amount of the accounts receivable sold and the sum of the cash received is recorded as a loss on sale of receivables in other income (expense), net in our condensed consolidated statements of income. The loss on sale of accounts receivable was $1.5 million for the three months ended March 31, 2023.

NOTE 15—SUPPLY CHAIN FINANCE

We use a supply chain finance program in connection with the purchase of goods, which allows our suppliers to work directly with a third party to provide financing by purchasing their receivables earlier in the payment cycle. We maintain the same contractually agreed upon invoice terms prior to each supplier entering into the program. As of March 31, 2023, we had approximately $47.0 million outstanding under the program, which is included in accounts payable on our condensed consolidated balance sheet.

NOTE 16—CASH FLOW INFORMATION

Leased Asset Program

Our electrical submersible pumping leased asset program is reported in our Production & Automation Technologies segment. At the time of purchase, assets are recorded to inventory and are transferred to property, plant, and equipment when a customer contracts for an asset under our leased asset program. During the three months ended March 31, 2023 and March 31, 2022, we transferred $28.4 million and $12.9 million, respectively, of inventory into property, plant, and equipment as a result of assets entering our leased asset program.

Expenditures for assets that are placed into our leased asset program expected to be recovered through sale are reported in leased assets in the operating section of our condensed consolidated statements of cash flows. All other capitalizable expenditures for assets that are placed into our leased asset program are classified as capital expenditures in the investing section of our condensed consolidated statements of cash flows.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis is our analysis of our financial performance, financial condition and significant trends that may affect our future performance. It should be read in conjunction with the condensed consolidated financial statements, and notes thereto, included elsewhere in this report. It contains forward-looking statements including, without limitation, statements relating to ChampionX’s plans, strategies, objectives, expectations and intentions that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the words “believe,” “anticipate,” “expect,” “may,” “intend,” “foresee,” “guidance,” “estimate,” “potential,” “outlook,” “plan,” “should,” “would,” “could,” “target,” “forecast” and similar expressions, including the negative thereof. We undertake no obligation to publicly update, revise or correct any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required under the federal securities laws. Readers are cautioned that such forward-looking statements should be read in conjunction with the disclosures under the heading “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS.”

EXECUTIVE OVERVIEW AND BUSINESS OUTLOOK

We are a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. Our expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. Our business is organized into four reportable segments: Production Chemical Technologies, Production & Automation Technologies, Drilling Technologies, and Reservoir Chemical Technologies. We refer to the Production Chemical Technologies segment and Reservoir Chemical Technologies segment together as the Chemical Technologies business.

Recent Events

Russia’s invasion of Ukraine and the related sanctions imposed present economic risk to companies that engage in business within, or have economic ties to, Russia. Our Russia operations (the “CT Russia Business”) are fully contained within the country and include a manufacturing plant and related inventory, service operations, an established customer base and local employees, and has the ability to operate as a standalone business under the brand, Master Chemicals. The revenues, net income and total assets of the CT Russia Business represent less than 2% of our consolidated results of operations. During the second quarter of 2022, we initiated a plan to dispose of the CT Russia Business. As a result, the CT Russia Business met the criteria to be reported as held for sale and, therefore, was reflected in our condensed consolidated balance sheet at the lower of its carrying value or its fair value less costs to sell. Due to the continued economic pressure and sanctions imposed by the United States, European Union, and United Kingdom, increasing costs to sell and increased trade regulations and political instability in Russia, we assessed the fair value less cost to sell the business as of March 31, 2023 to be zero, resulting in a $13.0 million pre-tax impairment expense recorded during the three months ended March 31, 2023.

Business Environment

We monitor macro-economic conditions and industry-specific drivers and key risk factors affecting our business segments as we formulate our strategic plans and make decisions related to allocating capital and human resources. Our business segments provide a broad range of technologies and products to support oil and gas production, exploration and development, and the midstream sector. As a result, we are substantially dependent upon global oil production levels, as well as new investment activity levels in the oil and gas and midstream sectors. Demand for our products, technologies and services is impacted by overall global demand for oil and gas, ongoing depletion rates of existing oil and gas wells, and our customers’ willingness to invest in the exploration for and development of new oil and gas resources. Our customers determine their operating and capital budgets based on current and expected future crude oil and natural gas prices, United States (“U.S.”) and worldwide rig count, U.S. well completions and expected industry cost levels, among other factors. Crude oil and natural gas prices are impacted by supply and demand, which are influenced by geopolitical, macroeconomic, and local events, and have historically been subject to substantial volatility and cyclicality. Rig count, footage drilled, and exploration and production (“E&P”) investment by oil and gas operators have often been used as leading indicators for the level of drilling and development activity and future production levels in the oil and gas sector.

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Market Conditions and Outlook

In recent years, oil prices have remained volatile due to various factors such as the impact of the COVID-19 pandemic, oil supply constraints, geopolitical instability and concerns of a global recession. During the first quarter of 2023, with the exception of a decline of oil prices in March in reaction to the U.S. regional bank instability, oil prices remained generally in line with those experienced in the later portion of 2022.

Oil and gas activity in the U.S., however, slowed during the first quarter of 2023, with U.S. rig counts experiencing the first quarterly decline since 2020. Supply continued to outpace demand, but this is expected to shift in the latter half of 2023, particularly after the recently announced OPEC+ supply actions. While crude oil production in the U.S. has continued its trend towards pre-COVID levels, its further growth is expected to be limited due to the reported quality of operators’ resource inventory of new drilling locations and public oil and gas producers maintaining capital discipline and a focus on shareholder returns versus new drilling activity. A shift to tighter oil supply is a positive indicator for oil prices. Growth in international oil activity is accelerating in the context of medium-term oil supply outlook.

Inflation rates have begun to slow. Nonetheless, we continue to actively monitor market trends specifically as it relates to the sourcing of raw materials. We also continue to work diligently to ensure selling prices offset the impact of raw material, labor, and logistics-related inflation on our businesses. Our productivity and continuous improvement initiatives are focused on delivering expanding profit margins in all our businesses.

CRITICAL ACCOUNTING ESTIMATES

Refer to our “Critical Accounting Estimates” included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our critical accounting estimates.

CONSOLIDATED RESULTS OF OPERATIONS

	Three Months Ended
	March 31,		December 31,		Variance
(in thousands)	2023		2022		$
Revenue	$	948,347	$	985,855	$	(37,508)
Cost of goods and services	664,992		703,232		(38,240)
Gross profit	283,355		282,623		732
Selling, general and administrative expense	160,816		146,835		13,981
Goodwill impairment	—		39,617		(39,617)
Long-lived asset impairments and (gain) loss on disposal groups	12,965		1,978		10,987
Interest expense, net	12,466		11,622		844
Other (income) expense, net	5,295		(4,706)		10,001
Income before income taxes	91,813		87,277		4,536
Provision for (benefit from) income taxes	28,669		21,008		7,661
Net income	63,144		66,269		(3,125)
Net income attributable to noncontrolling interest	(388)		(1,588)		1,200
Net income attributable to ChampionX	$	63,532	$	67,857	$	(4,325)

Revenue. Revenue decreased $37.5 million, or 4%, sequentially, primarily due to a decrease in our Production Chemical Technologies segment resulting from lower international activity, including as a result of typical seasonal declines. This was partially offset by increased revenues in our Production & Automation Technologies and Drilling Technologies segments resulting from incremental volumes and pricing.

Gross profit. Gross profit remained flat sequentially.

Selling, general and administrative expense. Selling, general and administrative expense increased $14.0 million, or 10%, sequentially primarily due to increases in information technology infrastructure spending, research and development activities, and professional fees.

19

Loss on disposal groups. During the first quarter of 2023, we recognized a $13.0 million pre-tax impairment expense to write down all of the assets within our CT Russia Business to its recoverable value of zero.

Other (income) expense, net. Other expense, net was $5.3 million for the three months ended March 31, 2023, compared to other income of $4.7 million in the prior quarter. This change was primarily due to foreign currency exchange losses in the current period compared to gains in the prior quarter.

Provision for income taxes. Our provision for income taxes reflected effective tax rates (“ETR”) of 31.2% and 24.1% for the three months ended March 31, 2023 and December 31, 2022, respectively. The increase to the ETR for the period ending March 31, 2023 was primarily driven by a discrete expense of $4.8 million recorded in our CT Russia Business.

SEGMENT RESULTS OF OPERATIONS

	Three Months Ended
	March 31,		December 31,		Variance
(in thousands)	2023		2022		$
Segment revenue:
Production Chemical Technologies	$	591,684	$	636,539	$	(44,855)
Production & Automation Technologies	251,548		244,181		7,367
Drilling Technologies	56,707		53,797		2,910
Reservoir Chemical Technologies	25,806		25,698		108
Corporate and other	22,602		25,640		(3,038)
Total revenue	$	948,347	$	985,855	$	(37,508)
Segment operating profit (loss):
Production Chemical Technologies	$	66,314	$	96,418	$	(30,104)
Production & Automation Technologies	34,792		18,104		16,688
Drilling Technologies	11,887		9,426		2,461
Reservoir Chemical Technologies	1,987		(16,884)		18,871
Total segment operating profit	114,980		107,064		7,916
Corporate expense and other	10,701		8,165		2,536
Interest expense, net	12,466		11,622		844
Income before income taxes	$	91,813	$	87,277	$	4,536

Production Chemical Technologies

Revenue. Production Chemical Technologies revenue decreased $44.9 million, or 7%, sequentially, mainly due to declines internationally, offset partially by higher volumes in the U.S., both of which are primarily due to typical seasonality.

Operating profit. Production Chemical Technologies operating profit decreased $30.1 million, or 31%, in the first quarter of 2023 compared to the prior quarter primarily due to the decline in revenue noted above. Additionally, the sequential results were impacted by the $13.0 million charge to write down the assets of the CT Russia Business recognized in the first quarter of 2023.

Production & Automation Technologies

Revenue. Production & Automation Technologies revenue increased marginally by $7.4 million, or 3%, as compared to the prior quarter due to incremental volumes and pricing.

Operating profit. Production & Automation Technologies operating profit increased $16.7 million, or 92%, in the first quarter of 2023 compared to the prior quarter due to favorable cost variances and productivity improvements.

20

Drilling Technologies

Revenue. Drilling Technologies revenue increased $2.9 million, or 5%, in the first quarter of 2023 compared to the prior quarter primarily due to increased volume as the worldwide rig count increased.

Operating profit. Drilling Technologies operating profit increased $2.5 million, or 26%, in the first quarter of 2023 compared to the prior quarter primarily due to the increased volumes noted above and lower costs associated with serving customers.

Reservoir Chemical Technologies

Revenue. Reservoir Chemical Technologies revenue remained flat sequentially.

Operating profit. Reservoir Chemical Technologies operating profit increased $18.9 million in the first quarter of 2023 compared to the prior quarter due to the fourth quarter of 2022 being negatively impacted by a goodwill impairment charge of $39.6 million. Also impacting this segment were $0.4 million of restructuring charges in the first quarter of 2023 compared to $21.0 million of restructuring income in the fourth quarter of 2022.

CAPITAL RESOURCES AND LIQUIDITY

Overview

Our primary source of cash is from operating activities. We have historically generated, and expect to continue to generate, positive cash flow from operations. Cash generated from operations is generally allocated to working capital requirements, investments to support profitable revenue growth and maintain our facilities and systems, acquisitions that create value through add-on capabilities that broaden our existing businesses and support our growth strategy, as well as share repurchases, dividend payments to stockholders, and debt repayments to reduce our leverage.

On June 7, 2022, we entered into a restated credit agreement, which provides for (i) a $625.0 million seven-year senior secured term loan B facility (the “2022 Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $700.0 million, of which $100.0 million is available for the issuance of letters of credit (the “2022 Revolving Credit Facility”). The full amount of the 2022 Term Loan Facility was funded, and $135.0 million of the 2022 Revolving Credit Facility was drawn, on June 7, 2022.

At March 31, 2023, we had cash and cash equivalents of $248.0 million compared to $250.2 million at December 31, 2022, primarily for working capital and operational purposes. At March 31, 2023, we had total liquidity of $915.3 million, comprised of $248.0 million of cash and $667.3 million of available capacity on the 2022 Revolving Credit Facility, which expires in June 2027.

At March 31, 2023, we had a long-term debt balance of $595.9 million, net of the current portion of long-term debt of $6.3 million, primarily consisting of the 2022 Term Loan Facility with a principal amount of $621.9 million.

Outlook

We expect to generate cash from operations to support business requirements and, if necessary, through the use of the 2022 Revolving Credit Facility. Volatility in credit, equity and commodity markets can create uncertainty for our businesses. However, the Company believes, based on our current financial condition and current expectations of future market conditions, that we will meet our short- and long-term needs with a combination of cash on hand, cash generated from operations, the 2022 Revolving Credit Facility and access to capital markets.

On February 16, 2023, the Company announced that our Board of Directors (“Board”) approved an increase of our regular quarterly cash dividend to $0.085 per share of the Company’s common stock. Our first quarter cash dividend of $0.085 per share was declared on February 15, 2023 and is payable on April 28, 2023 to stockholders of record on April 7, 2023. Subsequent dividend declarations, if any, including the amounts and timing of future dividends, are subject to approval by our Board and will depend on future business conditions, financial conditions, results of operations and other factors.

21

On March 7, 2022, the Company announced that our Board approved a new $250 million share repurchase program (“2022 Share Repurchase Program”). On October 24, 2022, our Board increased the authorization under this program to $750 million. Under the 2022 Share Repurchase Program, shares of the Company’s common stock may be repurchased periodically, including in the open market or privately negotiated transactions. We expect to fund share repurchases from cash generated from operations. During the three months ended March 31, 2023, we repurchased and cancelled 1,302,499 shares of common stock at a volume-weighted average price of $30.71 per share for a total of $40.0 million, including commissions. The actual timing, manner, number, and value of shares repurchased under the program will depend on a number of factors, including the availability of excess free cash, the market price of the Company’s common stock, general market and economic conditions, applicable requirements, and other business considerations.

In 2023, we expect to fund our capital expenditures and reduce outstanding debt through earnings and working capital improvements. We project 2023 capital expenditures of 3.0% to 3.5% of revenue inclusive of capital investments for our electric submersible pump leased assets.

Information related to guarantees is incorporated herein by reference from Note 6—Commitments and Contingencies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Cash Flows

	Three Months Ended March 31,
(in thousands)	2023		2022
Cash from operating activities	$	92,378	$	(43,125)
Cash used in investing activities	(23,025)		(21,064)
Cash used in financing activities	(71,107)		(9,798)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(437)		(582)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	(2,191)	$	(74,569)

Operating Activities

Cash provided by operating activities during the three months ended March 31, 2023 was $92.4 million as compared to cash used in operating activities of $43.1 million for the three months ended March 31, 2022. The change was primarily driven by the use of cash for working capital items. Changes in working capital items used cash of $49.2 million during the three months ended March 31, 2023 compared to cash used of $136.3 million during 2022. The change in working capital items primarily related to strong cash collections during the 2023 period.

Expenditures for assets that are placed into our leased asset program expected to be recovered through sale are reported in leased assets in the operating section of our condensed consolidated statements of cash flows. All other capitalizable expenditures for assets that are placed into our leased asset program are classified as capital expenditures in the investing section of our condensed consolidated statements of cash flows.

Investing Activities

Cash used in investing activities was $23.0 million for the three months ended March 31, 2023, and was primarily comprised of capital expenditures of $26.5 million, partially offset by $3.5 million of cash proceeds from the sale of fixed assets.

Cash used in investing activities was $21.1 million for the three months ended March 31, 2022, and was primarily comprised of capital expenditures of $30.6 million and acquisitions, net of cash acquired, of $3.2 million. This was partially offset by $12.7 million of cash proceeds from the sale of fixed assets.

Financing Activities

Cash used in financing activities of $71.1 million for the three months ended March 31, 2023 was primarily the result of repurchases of our common stock of $40.4 million, net repayments totaling $26.6 million on long-term debt, dividends paid of $15.0 million, payments related to taxes withheld on stock-based compensation of $5.1 million, payments of finance lease obligations of $2.0 million, and distributions to non-controlling interests of $0.8 million. This was partially offset by $15.8 million of proceeds expected to be remitted under the Accounts Receivable Facility and $3.0 million in cash proceeds from the exercise of stock options.

22

Cash used in financing activities of $9.8 million for the three months ended March 31, 2022 was primarily the result of repayments totaling $6.7 million on long-term debt, payments related to taxes withheld on stock-based compensation of $2.6 million, and payments totaling $1.5 million for finance lease obligations. This was partially offset by $1.1 million in cash proceeds from the exercise of stock options.

Revolving Credit Facility

A summary of the 2022 Revolving Credit Facility at March 31, 2023 was as follows:

(in millions) Description	Amount		Debt Outstanding		Letters of Credit		Unused Capacity		Maturity
Five-year revolving credit facility	$	700.0	$	—	$	32.7	$	667.3	June 2027

Additionally, we have letters of credit outside of the 2022 Revolving Credit Facility totaling approximately $1.7 million. As of March 31, 2023, we were in compliance with all restrictive covenants under the 2022 Revolving Credit Facility.

Accounts Receivable Facility

On June 28, 2022, we entered into an uncommitted accounts receivable purchase agreement (the “Accounts Receivable Facility”) with JPMorgan Chase Bank, N.A. as the purchaser. Transfers under the Accounts Receivable Facility are accounted for as sales of receivables.

The amount available for sale under the Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of $160.0 million in receivables may be sold and remain unpaid under the Accounts Receivable Facility at any time. Accounts receivable sold that remained outstanding were $79.4 million for the three months ended March 31, 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We may be exposed to certain market risks arising from the use of financial instruments in the ordinary course of business. For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2022. Our exposure to market risk has not materially changed since December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2023.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in various pending or potential legal actions in the ordinary course of our business. Management is unable to predict the ultimate outcome of these actions because of the inherent uncertainty of litigation. However, management believes the most probable, ultimate resolution of these matters will not have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows. See Note 6—Commitments and Contingencies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

There have not been material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table contains information about our purchases of our common stock during the three months ended March 31, 2023.

Period	Total Number of Shares Purchased	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of a Publicly Announced Program (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (2)
January 1-31, 2023	—	$	—	—	$	569,858,404
February 1-28, 2023	1,302,499	$	30.71	1,302,499	$	529,832,370
March 1-31, 2023	—	$	—	—	$	529,832,370
Total	1,302,499	$	30.71	1,302,499

_______________________

(1)Excluding fees, commissions, and expenses associated with the share repurchases.

(2)On March 7, 2022, the Company announced that our Board authorized the Company to repurchase up to $250 million of its common stock. On October 24, 2022, our Board increased the authorization under this program to $750 million. This program has no time limit and does not obligate the Company to acquire any particular amount of shares of its common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Iran Threat Reduction and Syria Human Rights Act of 2012

Under the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with entities or individuals designated pursuant to certain Executive Orders. Disclosure is required even where the activities are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and even if the activities are not covered or prohibited by U.S. law.

As authorized by the U.S. Treasury’s Office of Foreign Assets Control (“OFAC”), a non-U.S. subsidiary of the Company which is part of our Chemical Technologies business completed sales of products used for process and water treatment applications in upstream oil and gas production related to the operation of and production from the Rhum gas field off the Scottish coast (“Rhum”) totaling $296,630 during the period from January 1, 2023 to March 31, 2023. The net profit before taxes associated with these sales for each period were nominal. Rhum is jointly owned by Serica Energy plc and Iranian Oil Company (U.K.) Limited. Our non-U.S. subsidiary intends to continue the Rhum-related activities, consistent with a specific license obtained from OFAC by its customers, and such activities may require additional disclosure pursuant to the above mentioned statute.

24

ITEM 6. EXHIBITS

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Exhibit No.	Filing Date
3.1	Amended and Restated Certificate of Incorporation of the Company.	8-K	3.1	May 11, 2018
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company.	8-K	3.1	June 4, 2020
3.3	Amended and Restated By-Laws of the Company.	8-K	3.1	November 14, 2022
10.1*	Joinder Agreement to Master Receivable Purchase Agreement, dated as of March 28, 2023, among Apergy ESP Systems, LLC, ChampionX LLC and US Synthetic Corporation, as Sellers, Apergy USA, Inc., as Servicer, and JPMorgan Chase Bank, N.A., as Purchaser.
31.1*	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1**	Certification of Chief Executive Officer Under Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.
32.2**	Certification of Chief Financial Officer Under Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith
** Furnished herewith

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CHAMPIONX CORPORATION
(Registrant)
/s/ ANTOINE MARCOS
Antoine Marcos
Vice President, Corporate Controller and Chief Accounting Officer
(Principal Accounting Officer and a Duly Authorized Officer)
Date:	April 25, 2023

26

EX-10.1

Exhibit 10.1

JOINDER AGREEMENT TO

MASTER RECEIVABLE PURCHASE AGREEMENT

THIS JOINDER AGREEMENT, dated as of March 28, 2023, (this “Joinder Agreement”) among Apergy ESP Systems, LLC, the Person to be joined hereby as a Seller and Servicer under the Purchase Agreement (as defined below) (the “New Seller”), each Seller and Servicer party to the Purchase Agreement as of the date hereof (collectively, the “Existing Sellers”), and JPMorgan Chase Bank, N.A.(the “Purchaser”).

BACKGROUND

1.    The Existing Sellers and the Purchaser have entered into that certain Master Receivables Purchase Agreement, dated as of June 28, 2022 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).

2.    The New Seller desires to become a party to the Purchase Agreement as a Seller and a Servicer pursuant to Section 1(g) thereof.

3.    The parties would like to make certain amendments to Schedule 1 (Account Debtor Information of the RPA.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Definitions. Capitalized terms used in this Joinder Agreement and not otherwise defined herein shall have the meanings assigned thereto in the Purchase Agreement.

SECTION 2. Purchase Agreement. The New Seller hereby joins the Purchase Agreement pursuant to Section 1(g) thereof for the purpose of becoming a Seller and a Servicer thereunder and agrees to be bound by all terms and conditions of the Purchase Agreement as and with respect to itself and the Receivables sold by it to the Purchaser. The New Seller hereby acknowledges that it has received a copy of the Purchase Agreement, each other Transaction Document and all related agreements.

SECTION 3. Amendment to Schedule I. Schedule I (Account Debtor Information) of the RPA is hereby deleted in its entirety and replaced with a new Schedule I in the form of Exhibit A attached to this Joinder Agreement.

SECTION 4. Miscellaneous.

(a)    The New Seller’s chief executive office, principal place of business and the office where it keeps its records concerning the Purchased Receivables is 2445 Technology Forest Boulevard, Building 4, 12th Floor, The Woodlands, TX 77381. The New Seller’s jurisdiction of organization is Oklahoma. The Collection Account(s) and Seller’s Account(s) for the New Seller for purposes of Schedule II to the Purchase Agreement and its notice information for purposes of Schedule III to the Purchase Agreement are as follows:

List Account(s):

[on file with Purchaser]

Notice Information:

c/o ChampionX Corporation

Attention: General Counsel

2445 Technology Forest Boulevard

Building 4, 12th Floor

The Woodlands, TX 77381

general.counsel@championx.com

(b)    This Joinder Agreement shall be governed by the laws of the State of New York, without giving effect to conflict of law principles that would require the application of the law of any other jurisdiction.

(c)    This Joinder Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

(d)    This Joinder Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Any signature (including, without limitation, (x) any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record and (y) any facsimile or .pdf signature) hereto or to any other certificate, agreement or document related to this transaction, and any contract formation or record-keeping, in each case, through electronic means, shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act, and the parties hereto hereby waive any objection to the contrary.

(e)    By signing in the space provided for it below, ChampionX Corporation, in its capacity as guarantor under the Performance Undertaking, hereby confirms, acknowledges and agrees that the New Seller shall be a “Guaranteed Entity” and covered by all of the terms and guarantees of the Performance Undertaking provided by ChampionX Corporation.

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be executed by its duly authorized officer as of the date and year first above written.

APERGY ESP SYSTEMS, LLC,

as a Seller and Servicer

By:__/s/ Daniel T. Erdman__________________

Name:    Daniel T. Erdman

Title:    Vice President, Chief Financial Officer and Treasurer

JPMORGAN CHASE BANK, N.A., as Purchaser

By:___/s/ Jason Benson________________

Name:    Jason Benson

Title:    Executive Director

CONFIRMED AND AGREED:

CHAMPIONX LLC,

as an Existing Seller

By:___/s/ Daniel T. Erdman__________

Name:    Daniel T. Erdman

Title:    Vice President and Treasurer

US SYNTHETIC CORPORATION,

as an Existing Seller

By:__/s/ Curtis Stucki_______________

Name:    Curtis Stucki

Title:    Vice President, Chief Financial Officer and Treasurer

CHAMPIONX CORPORATION, as Guarantor

By:__/s/ Daniel T. Erdman____________

Name:    Daniel T. Erdman

Title:    Vice President and Treasurer

Exhibit A

Schedule I

Account Debtor Information

[on file with Purchaser]

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Sivasankaran Somasundaram, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of ChampionX Corporation (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	April 25, 2023	/s/ SIVASANKARAN SOMASUNDARAM
		Sivasankaran Somasundaram
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Kenneth M. Fisher, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of ChampionX Corporation (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	April 25, 2023	/s/ KENNETH M. FISHER
		Kenneth M. Fisher
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

UNDER SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002, 18 U.S.C. SECTION 1350

I, Sivasankaran Somasundaram, President and Chief Executive Officer of ChampionX Corporation (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(a) The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	April 25, 2023	/s/ SIVASANKARAN SOMASUNDARAM
		Sivasankaran Somasundaram
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

UNDER SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002, 18 U.S.C. SECTION 1350

I, Kenneth M. Fisher, Executive Vice President and Chief Financial Officer of ChampionX Corporation (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(a) The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	April 25, 2023	/s/ KENNETH M. FISHER
		Kenneth M. Fisher
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

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Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 20, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-38441
Entity Registrant Name	ChampionX Corp
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-3066826
Entity Address, Address Line One	2445 Technology Forest Blvd,
Entity Address, Address Line Two	Building 4, 12th Floor
Entity Address, City or Town	The Woodlands,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77381
City Area Code	(281)
Local Phone Number	403-5772
Security 12b Title	Common stock, $0.01 par value
Trading Symbol	CHX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		197,973,797
Entity Central Index Key	0001723089
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue:
Lease and other revenue	$ 22,079	$ 18,898
Total revenue	948,347	865,960
Cost of goods and services	664,992	658,350
Gross profit	283,355	207,610
Costs and expenses:
Selling, general and administrative expense	160,816	150,360
Loss on disposal group	12,965	0
Interest expense, net	12,466	11,363
Other expense, net	5,295	1,320
Income before income taxes	91,813	44,567
Provision for income taxes	28,669	6,394
Net income	63,144	38,173
Net income (loss) attributable to noncontrolling interest	(388)	1,471
Net income attributable to ChampionX	$ 63,532	$ 36,702
Earnings per share attributable to ChampionX:
Basic (in dollars per share)	$ 0.32	$ 0.18
Diluted (in dollars per share)	$ 0.31	$ 0.18
Weighted-average shares outstanding:
Weighted-average shares outstanding, basic (in shares)	198,286	203,079
Weighted-average shares outstanding, diluted (in shares)	202,440	208,850
Product revenue
Revenue:
Revenue	$ 833,023	$ 750,668
Service revenue
Revenue:
Revenue	$ 93,245	$ 96,394

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 63,144	$ 38,173
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(10,676)	(1,565)
Cash flow hedges	(4,689)	(1,299)
Defined pension and other post-retirement benefits adjustments, net	53	69
Other comprehensive loss	(15,312)	(2,795)
Comprehensive income	47,832	35,378
Less: Comprehensive income (loss) attributable to noncontrolling interest	(388)	1,471
Comprehensive income attributable to ChampionX	$ 48,220	$ 33,907

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 247,996	$ 250,187
Receivables, net	539,380	601,061
Inventories, net	591,788	542,543
Assets held for sale	15,316	29,334
Prepaid expenses and other current assets	74,018	75,456
Total current assets	1,468,498	1,498,581
Property, plant, and equipment, net of accumulated depreciation of $717,383 in 2023 and $693,226 in 2022	739,853	734,810
Goodwill	666,689	679,488
Intangible assets, net	286,888	305,010
Operating lease right-of-use assets	89,344	92,928
Other non-current assets	76,064	76,666
Total assets	3,327,336	3,387,483
Current Liabilities:
Current portion of long-term debt	6,250	6,250
Accounts payable	539,166	469,566
Accrued compensation and employee benefits	61,535	102,750
Current portion of operating lease liabilities	27,396	28,838
Accrued distributor fees	67,096	102,034
Liabilities held for sale	0	7,186
Accrued expenses and other current liabilities	139,564	142,352
Total current liabilities	841,007	858,976
Long-term debt	595,938	621,702
Deferred income taxes	84,551	94,235
Operating lease liabilities	57,247	59,686
Other long-term liabilities	78,424	75,669
Total liabilities	1,657,167	1,710,268
Stockholders’ equity:
Common stock (2.5 billion shares authorized, $0.01 par value) 198.0 million shares and 198.5 million shares issued and outstanding in 2023 and 2022, respectively	1,980	1,985
Capital in excess of par value of common stock	2,238,027	2,249,698
Accumulated deficit	(506,458)	(527,603)
Accumulated other comprehensive loss	(44,842)	(29,530)
ChampionX stockholders’ equity	1,688,707	1,694,550
Noncontrolling interest	(18,538)	(17,335)
Total equity	1,670,169	1,677,215
Total liabilities and equity	$ 3,327,336	$ 3,387,483

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accumulated depreciation on property, plant, and equipment	$ 717,383	$ 693,226
Common stock, shares authorized (in shares)	2,500,000,000	2,500,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued (in shares)	198,000,000	198,500,000
Common stock, shares outstanding (in shares)	198,000,000	198,500,000

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock, Par Value	Common Stock, Capital in Excess of Par Value	Accum. Deficit	Accum. Other Comp. Loss	Non-controlling Interest
Beginning balance (in shares) at Dec. 31, 2021		202,866,000
Beginning balance at Dec. 31, 2021	$ 1,754,307	$ 2,029	$ 2,315,399	$ (525,158)	$ (21,625)	$ (16,338)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	38,173			36,702		1,471
Other comprehensive loss	(2,795)				(2,795)
Stock-based compensation (in shares)		290,000
Stock-based compensation	4,728	$ 3	4,725
Stock options exercised (in shares)		189,000
Stock options exercised	1,055	$ 1	1,054
Taxes withheld on issuance of stock-based awards	(2,639)		(2,639)
Dividends declared to common stockholders	(15,465)			(15,465)
Cumulative translation adjustments	208					208
Ending balance (in shares) at Mar. 31, 2022		203,345,000
Ending balance at Mar. 31, 2022	$ 1,777,572	$ 2,033	2,318,539	(503,921)	(24,420)	(14,659)
Beginning balance (in shares) at Dec. 31, 2022	198,500,000	198,466,000
Beginning balance at Dec. 31, 2022	$ 1,677,215	$ 1,985	2,249,698	(527,603)	(29,530)	(17,335)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	63,144			63,532		(388)
Other comprehensive loss	(15,312)				(15,312)
Stock-based compensation (in shares)		327,000
Stock-based compensation	5,234	$ 3	5,231
Stock options exercised (in shares)		481,000
Stock options exercised	3,014	$ 5	3,009
Taxes withheld on issuance of stock-based awards	(5,100)		(5,100)
Dividends declared to common stockholders	$ (16,784)			(16,784)
Repurchase and cancellation of common stock (in shares)	(1,302,499)	(1,302,000)
Repurchase and cancellation of common stock	$ (40,427)	$ (13)	(14,811)	(25,603)
Distributions to noncontrolling interest	(823)					(823)
Cumulative translation adjustments	$ 8					8
Ending balance (in shares) at Mar. 31, 2023	198,000,000	197,972,000
Ending balance at Mar. 31, 2023	$ 1,670,169	$ 1,980	$ 2,238,027	$ (506,458)	$ (44,842)	$ (18,538)

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares		3 Months Ended
	Feb. 15, 2023	Mar. 31, 2023	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Dividends declared to common shareholders (in dollars per share)	$ 0.085	$ 0.085	$ 0.075

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 63,144	$ 38,173
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	56,710	57,699
Loss on disposal group	12,965	0
Stock-based compensation	5,234	4,728
Provision for inventory obsolescence and write-downs	9,966	3,988
Deferred income taxes	(8,441)	(7,788)
(Gain) loss on disposal of fixed assets	(534)	(5,070)
Amortization of deferred loan costs and accretion of discount	1,014	828
Other	1,512	612
Changes in operating assets and liabilities (net of effects of foreign exchange):
Receivables	62,673	(73,262)
Inventories	(63,139)	(81,283)
Prepaid expenses and other current assets	(2,060)	6,647
Accounts payable	40,708	27,184
Accrued compensation and employee benefits	(42,025)	(38,174)
Accrued expenses and other liabilities	(39,051)	28,746
Leased assets	(9,830)	(5,265)
Other	3,532	(888)
Net cash flows provided by (used in) operating activities	92,378	(43,125)
Cash flows from investing activities:
Capital expenditures	(26,530)	(30,597)
Proceeds from sale of fixed assets	3,505	12,731
Acquisitions, net of cash acquired	0	(3,198)
Net cash used for investing activities	(23,025)	(21,064)
Cash flows from financing activities:
Repayment of long-term debt	(26,563)	(6,713)
Repurchases of common stock	(40,428)	0
Dividends paid	(15,011)	0
Payments related to taxes withheld on stock-based compensation	(5,100)	(2,639)
Payment of finance lease obligations	(1,970)	(1,501)
Distributions to noncontrolling interest	(823)	0
Proceeds from exercise of stock options	3,014	1,055
Proceeds expected to be remitted under the Accounts Receivable Facility	15,774	0
Net cash used for financing activities	(71,107)	(9,798)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(437)	(582)
Net decrease in cash and cash equivalents and restricted cash	(2,191)	(74,569)
Cash and cash equivalents and restricted cash at beginning of period	250,187	255,178
Cash and cash equivalents and restricted cash at end of period	$ 247,996	$ 180,609

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Business

ChampionX Corporation is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. Our expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well.

Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “ChampionX” mean ChampionX Corporation, together with our subsidiaries where the context requires.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of ChampionX have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair statement of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, 2023.

Significant Accounting Policies

Please refer to “Note 1–Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for the discussion of our significant accounting policies.

New Accounting Standards Issued

In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that a buyer in a supplier finance program disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

The adoption of this ASU did not have a material effect on our consolidated financial statements. See Note 15—Supply Chain Finance for information on our supplier finance programs.

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Our reporting segments are:

•Production Chemical Technologies—provides oil and natural gas production and midstream markets with solutions to manage and control corrosion, oil and water separation, flow assurance, sour gas treatment and a host of water-related issues.

•Production & Automation Technologies—designs, manufactures, markets and services a full range of artificial lift equipment, end-to-end digital automation solutions, as well as other production equipment and asset monitoring technologies. Production & Automation Technologies’ products are sold under a collection of brands including Harbison-Fischer, Norris, Alberta Oil Tool, Oil Lift Technology, PCS Ferguson, Pro-Rod, Upco, Unbridled ESP, Norriseal-Wellmark, Quartzdyne, Spirit, Theta, Timberline and Windrock.

•Drilling Technologies—designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits under the US Synthetic brand.

•Reservoir Chemical Technologies—manufactures specialty products that support well stimulation, construction (including drilling and cementing) and remediation needs in the oil and natural gas industry.

We refer to our Production Chemical Technologies segment and our Reservoir Chemical Technologies segment collectively as our Chemical Technologies business. Although Reservoir Chemical Technologies is not required to be disclosed separately as a reportable segment based on materiality, management believes the additional information may contribute to a better understanding of the business. Other business activities that do not meet the criteria of an operating segment have been combined into Corporate and other. Corporate and other includes (i) corporate and overhead expenses, and (ii) revenue and costs for activities that are not operating segments.

Segment revenue and segment operating profit

	Three Months Ended March 31,
(in thousands)	2023		2022
Segment revenue:
Production Chemical Technologies	$	591,684	$	514,972
Production & Automation Technologies	251,548		220,349
Drilling Technologies	56,707		56,859
Reservoir Chemical Technologies	25,806		39,900
Corporate and other (1)	22,602		33,880
Total revenue	$	948,347	$	865,960
Segment operating profit (loss):
Production Chemical Technologies	$	66,314	$	31,263
Production & Automation Technologies	34,792		24,710
Drilling Technologies	11,887		15,220
Reservoir Chemical Technologies	1,987		(3,469)
Total segment operating profit	114,980		67,724
Corporate and other (1)	10,701		11,794
Interest expense, net	12,466		11,363
Income before income taxes	$	91,813	$	44,567

_______________________

(1)    Corporate and other includes costs not directly attributable or allocated to our reporting segments such as overhead and other costs pertaining to corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply and Product Transfer Agreement with Ecolab Inc. (“Ecolab”) are included within Corporate and other.

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REVENUE

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Our revenue is generated primarily from product sales. Service revenue is generated from providing services to our customers. These services include installation, repair and maintenance, laboratory and logistics services, chemical management services, troubleshooting, reporting, water treatment services, technical advisory assistance, emissions detection and monitoring, and other field services. Lease revenue is derived from rental income of leased production equipment. As our costs are shared across the various revenue categories, cost of goods sold is not tracked separately and is not discretely identifiable.

In certain geographical areas, the Company utilizes joint ventures and independent third-party distributors and sales agents to sell and market products and services. Amounts payable to independent third-party distributors and sales agents may fluctuate based on sales and timing of distributor fee payments. For services rendered by such independent third-party distributors and sales agents, the Company records the consideration received on a net basis within product revenue in our condensed consolidated statements of income. Additionally, amounts owed to distributors and sales agents are reported within accrued distributor fees within our consolidated balance sheets.

Revenue disaggregated by geography was as follows:

	Three Months Ended March 31, 2023
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other (1)		Total
United States	$	241,761	$	192,541	$	42,960	$	12,573	$	13,590	$	503,425
Latin America	124,471		4,688		—		3,968		967		134,094
Middle East & Africa	76,987		15,421		2,481		6,737		(385)		101,241
Canada	74,164		20,537		3,767		418		11		98,897
Europe	49,803		4,959		6,160		368		2,631		63,921
Asia-Pacific	9,219		2,078		1,337		1,179		5,788		19,601
Australia	5,949		11,324		—		—		—		17,273
Other	9,330		—		2		563		—		9,895
Total revenue	$	591,684	$	251,548	$	56,707	$	25,806	$	22,602	$	948,347
	Three Months Ended March 31, 2022
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other (1)		Total
United States	$	190,906	$	167,802	$	46,819	$	25,221	$	21,854	$	452,602
Latin America	99,605		5,003		—		3,590		725		108,923
Middle East & Africa	74,044		16,711		1,689		7,721		314		100,479
Canada	75,799		19,452		2,941		478		26		98,696
Europe	49,021		2,345		3,710		903		3,471		59,450
Asia-Pacific	8,483		1,671		1,675		1,045		7,490		20,364
Australia	5,843		7,275		—		108		—		13,226
Other	11,271		90		25		834		—		12,220
Total revenue	$	514,972	$	220,349	$	56,859	$	39,900	$	33,880	$	865,960

______________________

(1)    Revenues associated with sales under the Cross Supply and Product Transfer Agreement with Ecolab are included within Corporate and other.

Revenue is attributed to regions based on the location of our direct customer, which in some instances is an intermediary and not necessarily the end user.

Contract Balances

The beginning and ending contract asset and contract liability balances from contracts with customers were as follows:

(in thousands)	March 31, 2023		December 31, 2022
Contract assets	$	—	$	—
Contract liabilities - current	$	16,953	$	14,113

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INTANGIBLE ASSETS AND GOODWILL

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The components of our definite- and indefinite-lived intangible assets were as follows:

	March 31, 2023						December 31, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived intangible assets:
Customer relationships	$	582,498	$	414,737	$	167,761	$	582,466	$	407,212	$	175,254
Unpatented technologies	142,760		60,989		81,771		142,760		56,264		86,496
Favorable supply agreements	57,000		53,822		3,178		57,000		49,056		7,944
Trademarks	59,857		36,949		22,908		59,856		36,048		23,808
Patents	38,190		31,726		6,464		38,175		31,481		6,694
Other	1,894		1,888		6		1,892		1,878		14
	882,199		600,111		282,088		882,149		581,939		300,210
Indefinite-lived intangible assets:
Trademarks	3,600		—		3,600		3,600		—		3,600
In-process research and development	1,200		—		1,200		1,200		—		1,200
	4,800		—		4,800		4,800		—		4,800
Total	$	886,999	$	600,111	$	286,888	$	886,949	$	581,939	$	305,010

Goodwill

The carrying amount of goodwill, including changes therein, by reportable segment is below:

(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Total
December 31, 2022	$	367,084	$	211,268	$	101,136	$	—	$	679,488
Foreign currency translation	(12,802)		3		—		—		(12,799)
March 31, 2023	$	354,282	$	211,271	$	101,136	$	—	$	666,689

Goodwill is not subject to amortization but is tested for impairment on an annual basis or more frequently if impairment indicators arise.

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DEBT

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

Long-term debt consisted of the following:

(in thousands)	March 31, 2023		December 31, 2022
2022 Revolving Credit Facility	$	—	$	25,000
2022 Term Loan Facility	621,875		623,438
Total	621,875		648,438
Net unamortized discounts and issuance costs	(19,687)		(20,486)
Total long-term debt	602,188		627,952
Current portion of long-term debt (1)	(6,250)		(6,250)
Long-term debt, less current portion	$	595,938	$	621,702

_______________________

(1) Includes the mandatory amortization payments due within twelve months related to the 2022 Term Loan Facility as of March 31, 2023.

On June 7, 2022, we entered into a restated credit agreement, which provides for (i) a $625.0 million seven-year senior secured term loan B facility (the “2022 Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $700.0 million, of which $100.0 million is available for the issuance of letters of credit (the “2022 Revolving Credit Facility,” together with the 2022 Term Loan Facility, the “Senior Secured Credit Facility”). The full amount of the 2022 Term Loan Facility was funded, and $135.0 million of the 2022 Revolving Credit Facility was drawn, on June 7, 2022. As of March 31, 2023, we had no outstanding balance on the 2022 Revolving Credit Facility.

The 2022 Term Loan Facility matures June 7, 2029 and the 2022 Revolving Credit Facility matures June 7, 2027. The 2022 Term Loan Facility is subject to mandatory amortization payments of 1% per annum of the initial commitment paid quarterly, which began on December 30, 2022. The Senior Secured Credit Facility contains customary representations and warranties, covenants, and events of default for loan facilities of this type. We were in compliance with all covenants as of March 31, 2023.

At the Company’s election, outstanding borrowings under the Senior Secured Credit Facility will accrue interest at a per annum rate of (i) an adjusted SOFR rate plus the applicable spread or (ii) a base rate plus the applicable spread. On June 29, 2022, the Company executed a five-year amortizing floating-to-fixed interest rate swap to hedge our exposure to increases in variable interest rates on the 2022 Term Loan Facility. This interest rate swap agreement is based on a $300.0 million notional amount for the first three years, reducing to $150.0 million for years four and five. See Note 12—Derivatives and Hedging Transactions for additional information on interest rate swaps.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters, and lawsuits. We record liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. In accordance with applicable GAAP, the Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred.

Guarantees and Indemnifications

We have provided indemnities in connection with sales of certain businesses and assets, including indemnities for environmental health and safety, tax, and employment matters. We do not have any material liabilities recorded for these indemnifications and are not aware of any claims or other information that would give rise to material payments under such indemnities.

As of March 31, 2023 and December 31, 2022, we had $71.4 million and $82.4 million, respectively, of outstanding letters of credit, surety bonds and guarantees, which expire at various dates through 2039. These financial instruments are primarily maintained as security for insurance, warranty, and other performance obligations. Generally, we would only be liable for the amount of these letters of credit, surety bonds, and guarantees in the event of default in the performance of our obligations, the probability of which we believe is remote.

Litigation and Environmental Matters

The Company is party to various proceedings and claims incidental to its business, including matters arising under provisions relating to the protection of the environment. We review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and accrued to date, and the availability and extent of insurance coverage. We accrue a liability for legal matters that are probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 11 locations, the majority of which are in the United States (“U.S.”), and environmental liabilities have been accrued reflecting our best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. As of March 31, 2023 and December 31, 2022, environmental liability accruals related to these locations were $6.0 million and $5.9 million, respectively.

Prior to the commencement of our operations as an independent publicly traded company in 2018, groundwater contamination was discovered at the Norris Sucker Rods plant site located in Tulsa, Oklahoma (“Norris”). Initial remedial efforts were undertaken at the time of discovery of the contamination and Norris has since coordinated monitoring and remediation with the Oklahoma Department of Environmental Quality (“ODEQ”). As part of the ongoing long-term remediation process, Norris contracted an engineering and consulting firm to develop a range of possible additional remedial alternatives in order to accelerate the remediation process and associated cost estimates for the work. In October 2019, we received the firm’s preliminary remedial alternatives for consideration. We have submitted our long-term remediation plan and it was approved by ODEQ. We are now in discussion with ODEQ to finalize a consent order. Because we have not yet finalized the consent order for further remediation at the site and discussions with ODEQ remain ongoing, we cannot fully anticipate the timing, outcome or possible impact of such further remedial activities, financial or otherwise. As a result of the recommendations in the report, we accrued liabilities for these remediation efforts of approximately $2.0 million as of December 31, 2019. Liabilities could increase in the future at such time as we ultimately reach agreement with ODEQ on our remediation plan and such liabilities become probable and can be reasonably estimated; however, there have been no changes to our estimated liability as of March 31, 2023.

Matters Related to Deepwater Horizon Incident Response

On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after an explosion and fire, resulting in a massive oil spill. Certain entities that are now subsidiaries of ChampionX as a result of the acquisition of the Chemical Technologies business in 2020 (collectively the “COREXIT Defendants”) supplied COREXIT™ 9500, an oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule, which was used in the response to the spill. In connection with the provision of COREXIT™ 9500, the COREXIT Defendants were named in several lawsuits. Cases arising out of the Deepwater Horizon accident were administratively transferred and consolidated for pre-trial purposes under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 in the United States District Court in the Eastern District of Louisiana (E.D. La.) (“MDL 2179”). Claims related to the response to the oil spill were consolidated in a master complaint captioned the “B3 Master Complaint.” In 2011, Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) named the COREXIT Defendants and other unaffiliated companies as first party defendants (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against the COREXIT Defendants and other unaffiliated cross defendants. In April and June 2011, in support of its defense of the claims against it, the COREXIT Defendants filed counterclaims against the Cross Claimants. On May 18, 2012, the COREXIT Defendants filed a motion for summary judgment as to the claims in the B3 Master Complaint. On November 28, 2012, the Court granted the COREXIT Defendants’ motion and dismissed with prejudice the claims in the B3 Master Complaint asserted against the COREXIT Defendants. There currently remains one “B3” case that asserted claims against the COREXIT Defendants and that remains pending against other defendants. Because the Court’s decision was not a “final judgment” for purposes of appeal with respect to those claims, under Federal Rule of Appellate Procedure 4(a), the plaintiff will have 30 days after entry of final judgment in the case to appeal the Court’s summary judgment decision.

The Company believes the claims asserted against the COREXIT Defendants are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, we cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation.

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RESTRUCTURING AND OTHER RELATED CHARGES

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND OTHER RELATED CHARGES

RESTRUCTURING AND OTHER RELATED CHARGES

We approved various restructuring plans related to the consolidation of product lines and associated facility closures and workforce reductions during prior periods, which we expect to be completed during 2023. We recognized charges of $2.2 million during the three months ended March 31, 2023, consisting primarily of contract termination costs, inventory obsolescence, and employee severance and related benefits. During the three months ended March 31, 2022, we recorded restructuring and other charges of $8.5 million.

The following table presents the restructuring and other related charges by segment as classified in our condensed consolidated statements of income.

	Three Months Ended March 31,
(in thousands)	2023		2022
Segment restructuring charges (income):
Production Chemical Technologies	$	1,144	$	11,636
Production & Automation Technologies	785		(4,147)
Drilling Technologies	—		—
Reservoir Chemical Technologies	396		743
Corporate and other	(95)		252
Total	$	2,230	$	8,484
Statements of Income classification:
Cost of goods and services	$	1,531	$	(4,139)
Selling, general and administrative expense	699		12,623
Total	$	2,230	$	8,484

Our liability balance for restructuring and other related charges at March 31, 2023 reflects contract termination costs, employee severance and related benefits initiated during the period. Additional programs may be initiated during the remainder of 2023 with related restructuring charges.

The following table details our restructuring accrual activities during the three months ended March 31, 2023:

(in thousands)	Restructuring Accrual Balance
December 31, 2022	$	28,518
Restructuring charges	2,230
Asset sales and write-offs	(669)
Payments	(10,586)
Other, including foreign currency translation	(1)
March 31, 2023	$	19,492

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

Dividends

On February 16, 2023, the Company announced that our Board of Directors (“Board”) approved an increase of our regular quarterly cash dividend to $0.085 per share of the Company’s common stock. Our first quarter cash dividend of $0.085 per share was declared on February 15, 2023 and is payable on April 28, 2023 to stockholders of record on April 7, 2023. As a result, we recorded a dividend payable of $17.5 million on our condensed consolidated balance sheet as of March 31, 2023. Subsequent dividend declarations, if any, including the amounts and timing of future dividends, are subject to approval by the Board and will depend on future business conditions, financial conditions, results of operations and other factors.

Repurchases

On March 7, 2022, the Company announced that our Board authorized the Company to repurchase up to $250 million of its common stock. On October 24, 2022, our Board increased the authorization under this program to $750 million. This program has no time limit and does not obligate the Company to acquire any particular amount of shares of its common stock. During the three months ended March 31, 2023, we repurchased and cancelled 1,302,499 shares of common stock at a volume-weighted average price of $30.71 per share for a total of $40.0 million, including commissions.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows:

	Three Months Ended March 31,
(in thousands, except per share data)	2023		2022
Net income attributable to ChampionX	$	63,532	$	36,702
Weighted-average number of shares outstanding	198,286		203,079
Dilutive effect of stock-based compensation	4,154		5,771
Total shares and dilutive securities	202,440		208,850
Earnings per share attributable to ChampionX:
Basic	$	0.32	$	0.18
Diluted	$	0.31	$	0.18

For all periods presented, the computation of diluted earnings per share excludes awards with an anti-dilutive impact. For the three months ended March 31, 2023 and March 31, 2022, the diluted shares include the dilutive impact of equity awards except for approximately 0.6 million and 0.4 million shares, respectively, that were excluded because their inclusion would be anti-dilutive.

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ACQUISITIONS AND DIVESTITURES

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

Acquisitions

On February 23, 2022, we acquired the assets of Leak Surveys, Inc., a leader in optical gas imaging technology that provides aerial and ground-based emissions leak detection to the oil and gas industry. These assets have been included in our Production & Automation Technologies segment. Under the terms of the agreement, we paid an initial amount of $3.2 million, net of cash acquired, with an additional $0.5 million which was paid on the first anniversary of the closing date. We may also be required to make future payments of up to an additional $2.5 million, contingent on the future performance of the business. As part of our purchase price allocation, we recorded goodwill of $6.3 million in the first quarter of 2022. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements.

Divestitures

Due to the deteriorating business conditions in Russia following the Ukraine invasion and the resultant sanctions imposed by the United States, European Union, and United Kingdom, we initiated a plan to dispose of our operations in Russia (the “CT Russia Business”), which is included in our Production Chemical Technologies segment. As a result, the CT Russia Business met the criteria to be classified as held for sale during the second quarter of 2022 and we measured the carrying value of the disposal group to the lower of its carrying value or fair value less costs to sell.

We assess the fair value of the CT Russia Business (less any costs to sell) each reporting period that it remains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale.

Due to the continued deterioration of the business environment, increasing trade regulations and sanctions and Russia’s imposition of an exit tax on divestments to facilitate exit from in-country operations, we assessed the fair value less cost to sell the business as of March 31, 2023 to be zero, resulting in a $13.0 million pre-tax impairment expense recorded during the period.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1- Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2- Inputs include observable inputs other than quoted prices in active markets.

Level 3- Inputs are unobservable inputs for which there is little or no market data available.

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows:

		Carrying Amount
(in thousands)	Measurement Level	March 31, 2023		December 31, 2022
Assets
Foreign currency forward contracts	Level 2	$	3,796	$	7,066
Interest rate swaps	Level 2	4,974		8,476
Total		$	8,770	$	15,542
Liabilities
Foreign currency forward contracts	Level 2	$	3,161	$	4,209
Interest rate swaps	Level 2	—		—
Total		$	3,161	$	4,209

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. See Note 12—Derivatives and Hedging Transactions for further discussion of gross versus net presentation of the Company’s derivatives.

The carrying amounts of cash and cash equivalents, trade receivables, and accounts payable approximate their fair value due to their short-term nature.

The fair value of our term loan facility is based on Level 2 quoted market prices for the same or similar debt instruments. The fair value of our revolving line of credit approximates carrying value due to the variable interest rates charged on the

borrowings, which reprice frequently (Level 2). The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were:

	March 31, 2023				December 31, 2022
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2022 Revolving Credit Facility	$	—	$	—	$	25,000	$	25,000
2022 Term Loan Facility	$	621,875	$	618,766	$	623,438	$	610,969

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DERIVATIVES AND HEDGING TRANSACTIONS

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING TRANSACTIONS

DERIVATIVES AND HEDGING TRANSACTIONS

The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company also utilizes floating-to-fixed interest rate swap agreements as cash flow hedges on certain debt to mitigate interest rate risk. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. Derivative contracts are recorded as assets and liabilities on the balance sheet at fair value. We evaluated the interest rate swap hedge effectiveness and determined it to be perfectly effective. We evaluate foreign currency forward contracts hedge effectiveness at contract inception and thereafter on a quarterly basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Changes in fair value attributable to changes in spot exchange rates for derivative contracts that have been designated as cash flow hedges are recognized in accumulated other comprehensive income (loss) (“AOCI”) and reclassified into earnings in the same period the hedged transaction affects earnings and are presented in the same income statement line as the earnings effect of the hedged item. The Company accounts for the interest rate swap agreements as a cash flow hedge, thus the effective portion of gains and losses resulting from changes in fair value are recognized in AOCI and are amortized to interest expense over the term of the respective debt. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships.

The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swaps. We monitor our exposure to credit risk by using major banks and financial institutions as counterparties and monitoring their financial condition and credit profile. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary.

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to settle with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no cash collateral had been received or pledged related to the underlying derivatives. We have elected to present our derivative balances on a gross basis on the condensed consolidated balance sheet.

The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the condensed consolidated balance sheet.

	Derivative Assets				Derivative Liabilities
(in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Prepaid expenses and other current assets	$	8,367	$	11,911	$	—	$	—
Other non-current assets	403		3,631		—		—
Accrued expenses and other current liabilities	—		—		3,161		4,209
	$	8,770	$	15,542	$	3,161	$	4,209

The following table summarizes the notional values of the Company’s outstanding derivatives:

(in thousands)	March 31, 2023		December 31, 2022
Notional value of foreign currency forward contracts and interest rate swaps	$	875,633	$	965,973

Cash Flow Hedges

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, primarily related to inventory purchases. These forward contracts are designated as cash flow hedges. The changes in fair value of these contracts attributable to changes in spot exchange rates are recorded in AOCI until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the condensed consolidated statements of income (loss) as the underlying exposure being hedged. The forward points are marked-to-market monthly and recognized in the same line item in the condensed consolidated statements of income (loss) as the underlying exposure being hedged.

Under interest rate swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional principal amount. Any unrealized gain or loss at the time of settlement will be reclassified to interest expense, where we record the interest expense on the associated debt.

Derivatives Not Designated as Hedging Instruments

The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

Effect of Derivative Instruments on Income

The loss of all derivative instruments recognized is summarized below:

	Three Months Ended March 31,
(in thousands)	2023		2022
Loss (gain) reclassified from AOCI to income on cash flow hedges:
Cost of goods and services	$	(957)	$	71
Interest expense	(937)		—
Loss on derivatives not designated as hedging instruments:
Other (income) expense, net	1,441		4,160
Total loss of derivative instruments	$	(453)	$	4,231

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INVENTORIES

3 Months Ended

Mar. 31, 2023

Inventory, Net [Abstract]

INVENTORIES

INVENTORIES

Inventories consisted of the following:

(in thousands)	March 31, 2023		December 31, 2022
Raw materials	$	157,717	$	142,571
Work in progress	20,615		19,582
Finished goods	501,699		467,628
	680,031		629,781
Inventory reserve	(31,801)		(24,702)
LIFO adjustments (1)	(56,442)		(62,536)
Inventories, net	$	591,788	$	542,543

_______________________

(1) Represents the amount by which the current cost of LIFO inventories exceeded their carrying value.

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ACCOUNTS RECEIVABLE FACILITY

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

ACCOUNTS RECEIVABLE FACILITY

ACCOUNTS RECEIVABLE FACILITY

On June 28, 2022, we entered into an uncommitted accounts receivable purchase agreement (the “Accounts Receivable Facility”) with JPMorgan Chase Bank, N.A. as the purchaser. Transfers under the Accounts Receivable Facility are accounted for as sales of receivables, resulting in the receivables being derecognized from our condensed consolidated balance sheet. The purchaser assumes the credit risk at the time of sale and has the right at any time to assign or transfer (including as a participation interest) any of its rights under the purchased receivables to another bank or financial institution.

The amount available for sale under the Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of $160.0 million in receivables may be sold and remain unpaid under the Accounts Receivable Facility at any time.

Accounts receivable sold were $165.2 million for the three months ended March 31, 2023. The accounts receivable sold that remained outstanding as of March 31, 2023 was $79.4 million. During this period, cash receipts from the purchaser at the time of the sale were classified as operating activities in our condensed consolidated statement of cash flows. The difference between the carrying amount of the accounts receivable sold and the sum of the cash received is recorded as a loss on sale of receivables in other income (expense), net in our condensed consolidated statements of income. The loss on sale of accounts receivable was $1.5 million for the three months ended March 31, 2023.

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SUPPLY CHAIN FINANCE	3 Months Ended
	Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]
SUPPLY CHAIN FINANCE	SUPPLY CHAIN FINANCEWe use a supply chain finance program in connection with the purchase of goods, which allows our suppliers to work directly with a third party to provide financing by purchasing their receivables earlier in the payment cycle. We maintain the same contractually agreed upon invoice terms prior to each supplier entering into the program. As of March 31, 2023, we had approximately $47.0 million outstanding under the program, which is included in accounts payable on our condensed consolidated balance sheet.

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CASH FLOW INFORMATION

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

CASH FLOW INFORMATION

CASH FLOW INFORMATION

Leased Asset Program

Our electrical submersible pumping leased asset program is reported in our Production & Automation Technologies segment. At the time of purchase, assets are recorded to inventory and are transferred to property, plant, and equipment when a customer contracts for an asset under our leased asset program. During the three months ended March 31, 2023 and March 31, 2022, we transferred $28.4 million and $12.9 million, respectively, of inventory into property, plant, and equipment as a result of assets entering our leased asset program.

Expenditures for assets that are placed into our leased asset program expected to be recovered through sale are reported in leased assets in the operating section of our condensed consolidated statements of cash flows. All other capitalizable expenditures for assets that are placed into our leased asset program are classified as capital expenditures in the investing section of our condensed consolidated statements of cash flows.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of ChampionX have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair statement of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, 2023.

New Accounting Standards Issued

New Accounting Standards Issued

In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that a buyer in a supplier finance program disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

The adoption of this ASU did not have a material effect on our consolidated financial statements. See Note 15—Supply Chain Finance for information on our supplier finance programs.

Fair Value Measurements

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1- Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2- Inputs include observable inputs other than quoted prices in active markets.

Level 3- Inputs are unobservable inputs for which there is little or no market data available.

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Revenue and Operating Profit

Segment revenue and segment operating profit

	Three Months Ended March 31,
(in thousands)	2023		2022
Segment revenue:
Production Chemical Technologies	$	591,684	$	514,972
Production & Automation Technologies	251,548		220,349
Drilling Technologies	56,707		56,859
Reservoir Chemical Technologies	25,806		39,900
Corporate and other (1)	22,602		33,880
Total revenue	$	948,347	$	865,960
Segment operating profit (loss):
Production Chemical Technologies	$	66,314	$	31,263
Production & Automation Technologies	34,792		24,710
Drilling Technologies	11,887		15,220
Reservoir Chemical Technologies	1,987		(3,469)
Total segment operating profit	114,980		67,724
Corporate and other (1)	10,701		11,794
Interest expense, net	12,466		11,363
Income before income taxes	$	91,813	$	44,567

_______________________

(1)    Corporate and other includes costs not directly attributable or allocated to our reporting segments such as overhead and other costs pertaining to corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply and Product Transfer Agreement with Ecolab Inc. (“Ecolab”) are included within Corporate and other.

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REVENUE (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

	Three Months Ended March 31, 2023
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other (1)		Total
United States	$	241,761	$	192,541	$	42,960	$	12,573	$	13,590	$	503,425
Latin America	124,471		4,688		—		3,968		967		134,094
Middle East & Africa	76,987		15,421		2,481		6,737		(385)		101,241
Canada	74,164		20,537		3,767		418		11		98,897
Europe	49,803		4,959		6,160		368		2,631		63,921
Asia-Pacific	9,219		2,078		1,337		1,179		5,788		19,601
Australia	5,949		11,324		—		—		—		17,273
Other	9,330		—		2		563		—		9,895
Total revenue	$	591,684	$	251,548	$	56,707	$	25,806	$	22,602	$	948,347
	Three Months Ended March 31, 2022
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other (1)		Total
United States	$	190,906	$	167,802	$	46,819	$	25,221	$	21,854	$	452,602
Latin America	99,605		5,003		—		3,590		725		108,923
Middle East & Africa	74,044		16,711		1,689		7,721		314		100,479
Canada	75,799		19,452		2,941		478		26		98,696
Europe	49,021		2,345		3,710		903		3,471		59,450
Asia-Pacific	8,483		1,671		1,675		1,045		7,490		20,364
Australia	5,843		7,275		—		108		—		13,226
Other	11,271		90		25		834		—		12,220
Total revenue	$	514,972	$	220,349	$	56,859	$	39,900	$	33,880	$	865,960

______________________

(1)    Revenues associated with sales under the Cross Supply and Product Transfer Agreement with Ecolab are included within Corporate and other.

Schedule of Contract Balances

The beginning and ending contract asset and contract liability balances from contracts with customers were as follows:

(in thousands)	March 31, 2023		December 31, 2022
Contract assets	$	—	$	—
Contract liabilities - current	$	16,953	$	14,113

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INTANGIBLE ASSETS AND GOODWILL (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The components of our definite- and indefinite-lived intangible assets were as follows:

	March 31, 2023						December 31, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived intangible assets:
Customer relationships	$	582,498	$	414,737	$	167,761	$	582,466	$	407,212	$	175,254
Unpatented technologies	142,760		60,989		81,771		142,760		56,264		86,496
Favorable supply agreements	57,000		53,822		3,178		57,000		49,056		7,944
Trademarks	59,857		36,949		22,908		59,856		36,048		23,808
Patents	38,190		31,726		6,464		38,175		31,481		6,694
Other	1,894		1,888		6		1,892		1,878		14
	882,199		600,111		282,088		882,149		581,939		300,210
Indefinite-lived intangible assets:
Trademarks	3,600		—		3,600		3,600		—		3,600
In-process research and development	1,200		—		1,200		1,200		—		1,200
	4,800		—		4,800		4,800		—		4,800
Total	$	886,999	$	600,111	$	286,888	$	886,949	$	581,939	$	305,010

Schedule of Indefinite-Lived Intangible Assets

The components of our definite- and indefinite-lived intangible assets were as follows:

	March 31, 2023						December 31, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived intangible assets:
Customer relationships	$	582,498	$	414,737	$	167,761	$	582,466	$	407,212	$	175,254
Unpatented technologies	142,760		60,989		81,771		142,760		56,264		86,496
Favorable supply agreements	57,000		53,822		3,178		57,000		49,056		7,944
Trademarks	59,857		36,949		22,908		59,856		36,048		23,808
Patents	38,190		31,726		6,464		38,175		31,481		6,694
Other	1,894		1,888		6		1,892		1,878		14
	882,199		600,111		282,088		882,149		581,939		300,210
Indefinite-lived intangible assets:
Trademarks	3,600		—		3,600		3,600		—		3,600
In-process research and development	1,200		—		1,200		1,200		—		1,200
	4,800		—		4,800		4,800		—		4,800
Total	$	886,999	$	600,111	$	286,888	$	886,949	$	581,939	$	305,010

Schedule of Goodwill

The carrying amount of goodwill, including changes therein, by reportable segment is below:

(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Total
December 31, 2022	$	367,084	$	211,268	$	101,136	$	—	$	679,488
Foreign currency translation	(12,802)		3		—		—		(12,799)
March 31, 2023	$	354,282	$	211,271	$	101,136	$	—	$	666,689

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DEBT (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt consisted of the following:

(in thousands)	March 31, 2023		December 31, 2022
2022 Revolving Credit Facility	$	—	$	25,000
2022 Term Loan Facility	621,875		623,438
Total	621,875		648,438
Net unamortized discounts and issuance costs	(19,687)		(20,486)
Total long-term debt	602,188		627,952
Current portion of long-term debt (1)	(6,250)		(6,250)
Long-term debt, less current portion	$	595,938	$	621,702

_______________________

(1) Includes the mandatory amortization payments due within twelve months related to the 2022 Term Loan Facility as of March 31, 2023.

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RESTRUCTURING AND OTHER RELATED CHARGES (Tables)

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The following table presents the restructuring and other related charges by segment as classified in our condensed consolidated statements of income.

	Three Months Ended March 31,
(in thousands)	2023		2022
Segment restructuring charges (income):
Production Chemical Technologies	$	1,144	$	11,636
Production & Automation Technologies	785		(4,147)
Drilling Technologies	—		—
Reservoir Chemical Technologies	396		743
Corporate and other	(95)		252
Total	$	2,230	$	8,484
Statements of Income classification:
Cost of goods and services	$	1,531	$	(4,139)
Selling, general and administrative expense	699		12,623
Total	$	2,230	$	8,484

The following table details our restructuring accrual activities during the three months ended March 31, 2023:

(in thousands)	Restructuring Accrual Balance
December 31, 2022	$	28,518
Restructuring charges	2,230
Asset sales and write-offs	(669)
Payments	(10,586)
Other, including foreign currency translation	(1)
March 31, 2023	$	19,492

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings per Share

A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows:

	Three Months Ended March 31,
(in thousands, except per share data)	2023		2022
Net income attributable to ChampionX	$	63,532	$	36,702
Weighted-average number of shares outstanding	198,286		203,079
Dilutive effect of stock-based compensation	4,154		5,771
Total shares and dilutive securities	202,440		208,850
Earnings per share attributable to ChampionX:
Basic	$	0.32	$	0.18
Diluted	$	0.31	$	0.18

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured on Recurring Basis

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows:

		Carrying Amount
(in thousands)	Measurement Level	March 31, 2023		December 31, 2022
Assets
Foreign currency forward contracts	Level 2	$	3,796	$	7,066
Interest rate swaps	Level 2	4,974		8,476
Total		$	8,770	$	15,542
Liabilities
Foreign currency forward contracts	Level 2	$	3,161	$	4,209
Interest rate swaps	Level 2	—		—
Total		$	3,161	$	4,209

Schedule of Fair Value of Long-Term Debt

	March 31, 2023				December 31, 2022
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2022 Revolving Credit Facility	$	—	$	—	$	25,000	$	25,000
2022 Term Loan Facility	$	621,875	$	618,766	$	623,438	$	610,969

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DERIVATIVES AND HEDGING TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Values of Outstanding Derivatives

The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the condensed consolidated balance sheet.

	Derivative Assets				Derivative Liabilities
(in thousands)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Prepaid expenses and other current assets	$	8,367	$	11,911	$	—	$	—
Other non-current assets	403		3,631		—		—
Accrued expenses and other current liabilities	—		—		3,161		4,209
	$	8,770	$	15,542	$	3,161	$	4,209

The following table summarizes the notional values of the Company’s outstanding derivatives:

(in thousands)	March 31, 2023		December 31, 2022
Notional value of foreign currency forward contracts and interest rate swaps	$	875,633	$	965,973

Schedule of Derivative Instruments

The loss of all derivative instruments recognized is summarized below:

	Three Months Ended March 31,
(in thousands)	2023		2022
Loss (gain) reclassified from AOCI to income on cash flow hedges:
Cost of goods and services	$	(957)	$	71
Interest expense	(937)		—
Loss on derivatives not designated as hedging instruments:
Other (income) expense, net	1,441		4,160
Total loss of derivative instruments	$	(453)	$	4,231

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2023

Inventory, Net [Abstract]

Components of Inventory

Inventories consisted of the following:

(in thousands)	March 31, 2023		December 31, 2022
Raw materials	$	157,717	$	142,571
Work in progress	20,615		19,582
Finished goods	501,699		467,628
	680,031		629,781
Inventory reserve	(31,801)		(24,702)
LIFO adjustments (1)	(56,442)		(62,536)
Inventories, net	$	591,788	$	542,543

_______________________

(1) Represents the amount by which the current cost of LIFO inventories exceeded their carrying value.

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SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Total revenue	$ 948,347	$ 865,960
Income before income taxes	91,813	44,567
Interest expense, net	12,466	11,363
Operating Segments
Segment Reporting Information [Line Items]
Income before income taxes	114,980	67,724
Operating Segments | Production Chemical Technologies
Segment Reporting Information [Line Items]
Total revenue	591,684	514,972
Income before income taxes	66,314	31,263
Operating Segments | Production & Automation Technologies
Segment Reporting Information [Line Items]
Total revenue	251,548	220,349
Income before income taxes	34,792	24,710
Operating Segments | Drilling Technologies
Segment Reporting Information [Line Items]
Total revenue	56,707	56,859
Income before income taxes	11,887	15,220
Operating Segments | Reservoir Chemical Technologies
Segment Reporting Information [Line Items]
Total revenue	25,806	39,900
Income before income taxes	1,987	(3,469)
Corporate and Other
Segment Reporting Information [Line Items]
Total revenue	22,602	33,880
Income before income taxes	$ 10,701	$ 11,794

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REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 948,347	$ 865,960
United States
Disaggregation of Revenue [Line Items]
Total revenue	503,425	452,602
Latin America
Disaggregation of Revenue [Line Items]
Total revenue	134,094	108,923
Middle East & Africa
Disaggregation of Revenue [Line Items]
Total revenue	101,241	100,479
Canada
Disaggregation of Revenue [Line Items]
Total revenue	98,897	98,696
Europe
Disaggregation of Revenue [Line Items]
Total revenue	63,921	59,450
Asia-Pacific
Disaggregation of Revenue [Line Items]
Total revenue	19,601	20,364
Australia
Disaggregation of Revenue [Line Items]
Total revenue	17,273	13,226
Other
Disaggregation of Revenue [Line Items]
Total revenue	9,895	12,220
Operating Segments | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	591,684	514,972
Operating Segments | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	251,548	220,349
Operating Segments | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	56,707	56,859
Operating Segments | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	25,806	39,900
Operating Segments | United States | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	241,761	190,906
Operating Segments | United States | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	192,541	167,802
Operating Segments | United States | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	42,960	46,819
Operating Segments | United States | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	12,573	25,221
Operating Segments | Latin America | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	124,471	99,605
Operating Segments | Latin America | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	4,688	5,003
Operating Segments | Latin America | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Operating Segments | Latin America | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	3,968	3,590
Operating Segments | Middle East & Africa | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	76,987	74,044
Operating Segments | Middle East & Africa | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	15,421	16,711
Operating Segments | Middle East & Africa | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	2,481	1,689
Operating Segments | Middle East & Africa | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	6,737	7,721
Operating Segments | Canada | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	74,164	75,799
Operating Segments | Canada | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	20,537	19,452
Operating Segments | Canada | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	3,767	2,941
Operating Segments | Canada | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	418	478
Operating Segments | Europe | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	49,803	49,021
Operating Segments | Europe | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	4,959	2,345
Operating Segments | Europe | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	6,160	3,710
Operating Segments | Europe | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	368	903
Operating Segments | Asia-Pacific | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	9,219	8,483
Operating Segments | Asia-Pacific | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	2,078	1,671
Operating Segments | Asia-Pacific | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	1,337	1,675
Operating Segments | Asia-Pacific | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	1,179	1,045
Operating Segments | Australia | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	5,949	5,843
Operating Segments | Australia | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	11,324	7,275
Operating Segments | Australia | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Operating Segments | Australia | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	0	108
Operating Segments | Other | Production Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	9,330	11,271
Operating Segments | Other | Production & Automation Technologies
Disaggregation of Revenue [Line Items]
Total revenue	0	90
Operating Segments | Other | Drilling Technologies
Disaggregation of Revenue [Line Items]
Total revenue	2	25
Operating Segments | Other | Reservoir Chemical Technologies
Disaggregation of Revenue [Line Items]
Total revenue	563	834
Corporate and other
Disaggregation of Revenue [Line Items]
Total revenue	22,602	33,880
Corporate and other | United States
Disaggregation of Revenue [Line Items]
Total revenue	13,590	21,854
Corporate and other | Latin America
Disaggregation of Revenue [Line Items]
Total revenue	967	725
Corporate and other | Middle East & Africa
Disaggregation of Revenue [Line Items]
Total revenue	(385)	314
Corporate and other | Canada
Disaggregation of Revenue [Line Items]
Total revenue	11	26
Corporate and other | Europe
Disaggregation of Revenue [Line Items]
Total revenue	2,631	3,471
Corporate and other | Asia-Pacific
Disaggregation of Revenue [Line Items]
Total revenue	5,788	7,490
Corporate and other | Australia
Disaggregation of Revenue [Line Items]
Total revenue	0	0
Corporate and other | Other
Disaggregation of Revenue [Line Items]
Total revenue	$ 0	$ 0

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REVENUE - Contract Balances (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 0	$ 0
Contract liabilities - current	$ 16,953	$ 14,113

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INTANGIBLE ASSETS AND GOODWILL - Schedule of Intangibles (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 882,199	$ 882,149
Accumulated Amortization	600,111	581,939
Net Carrying Amount	282,088	300,210
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	4,800	4,800
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Intangible assets, gross	886,999	886,949
Accumulated Amortization	600,111	581,939
Intangible assets, net	286,888	305,010
Trademarks
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	3,600	3,600
In-process research and development
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	1,200	1,200
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	582,498	582,466
Accumulated Amortization	414,737	407,212
Net Carrying Amount	167,761	175,254
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	414,737	407,212
Unpatented technologies
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	142,760	142,760
Accumulated Amortization	60,989	56,264
Net Carrying Amount	81,771	86,496
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	60,989	56,264
Favorable supply agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	57,000	57,000
Accumulated Amortization	53,822	49,056
Net Carrying Amount	3,178	7,944
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	53,822	49,056
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	59,857	59,856
Accumulated Amortization	36,949	36,048
Net Carrying Amount	22,908	23,808
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	36,949	36,048
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	38,190	38,175
Accumulated Amortization	31,726	31,481
Net Carrying Amount	6,464	6,694
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	31,726	31,481
Other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,894	1,892
Accumulated Amortization	1,888	1,878
Net Carrying Amount	6	14
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	$ 1,888	$ 1,878

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INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 679,488
Foreign currency translation	(12,799)
Ending balance	666,689
Production Chemical Technologies
Goodwill [Roll Forward]
Beginning balance	367,084
Foreign currency translation	(12,802)
Ending balance	354,282
Production & Automation Technologies
Goodwill [Roll Forward]
Beginning balance	211,268
Foreign currency translation	3
Ending balance	211,271
Drilling Technologies
Goodwill [Roll Forward]
Beginning balance	101,136
Foreign currency translation	0
Ending balance	101,136
Reservoir Chemical Technologies
Goodwill [Roll Forward]
Beginning balance	0
Foreign currency translation	0
Ending balance	$ 0

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DEBT - Long-term Debt (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 621,875,000	$ 648,438,000
Net unamortized discounts and issuance costs	(19,687,000)	(20,486,000)
Total long-term debt	602,188,000	627,952,000
Current portion of long-term debt	(6,250,000)	(6,250,000)
Long-term debt, less current portion	595,938,000	621,702,000
2022 Term Loan Facility | Term Loan Facility
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	621,875,000	623,438,000
Revolving Credit Facility | 2022 Revolving Credit Facility | Credit Facility
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 0	$ 25,000,000

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DEBT - Narrative (Details) - USD ($)	Jun. 29, 2022	Jun. 07, 2022	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Carrying Amount			$ 621,875,000	$ 648,438,000
Interest rate swaps | Designated as Hedging Instrument
Debt Instrument [Line Items]
Derivative instrument, term (in years)	5 years
Interest Rate Swap, First Three Years | Designated as Hedging Instrument
Debt Instrument [Line Items]
Notional value of foreign currency forward contracts and interest rate swaps	$ 300,000,000
Interest Rate Swap, Years Four And Five | Designated as Hedging Instrument
Debt Instrument [Line Items]
Notional value of foreign currency forward contracts and interest rate swaps	$ 150,000,000
2022 Term Loan Facility | Term Loan Facility
Debt Instrument [Line Items]
Principal amount of debt issued		$ 625,000,000
Debt instrument, term (in years)		7 years
Carrying Amount			621,875,000	623,438,000
Mandatory amortization payment, percent per annum		1.00%
2022 Revolving Credit Facility | Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, term (in years)		5 years
Maximum borrowing capacity		$ 700,000,000
Borrowings from lines of credit		135,000,000
Carrying Amount			$ 0	$ 25,000,000
2022 Revolving Credit Facility | Credit Facility | Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 100,000,000

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COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) case location	Dec. 31, 2022 USD ($)	Dec. 31, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Outstanding letters of credit, surety bonds and guarantees	$ 71.4	$ 82.4
Number of locations participating in assessments and remediation | location	11
Accrued environmental liability	$ 6.0	$ 5.9	$ 2.0
Number of pending cases | case	1

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RESTRUCTURING AND OTHER RELATED CHARGES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 2,230	$ 8,484

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RESTRUCTURING AND OTHER RELATED CHARGES - Schedule of Restructuring and Other Related Charges (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 2,230	$ 8,484
Cost of goods and services
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1,531	(4,139)
Selling, general and administrative expense
Restructuring Cost and Reserve [Line Items]
Restructuring charges	699	12,623
Operating Segments | Production Chemical Technologies
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1,144	11,636
Operating Segments | Production & Automation Technologies
Restructuring Cost and Reserve [Line Items]
Restructuring charges	785	(4,147)
Operating Segments | Drilling Technologies
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	0
Operating Segments | Reservoir Chemical Technologies
Restructuring Cost and Reserve [Line Items]
Restructuring charges	396	743
Corporate and other
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ (95)	$ 252

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RESTRUCTURING AND OTHER RELATED CHARGES - Restructuring Reserve Rollforward (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Restructuring Accrual Balance
Beginning balance	$ 28,518
Restructuring charges	2,230
Asset sales and write-offs	(669)
Payments	(10,586)
Other, including foreign currency translation	(1)
Ending balance	$ 19,492

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STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended
	Feb. 16, 2023	Feb. 15, 2023	Mar. 31, 2023	Mar. 31, 2022	Oct. 24, 2022	Mar. 07, 2022
Stockholders' Equity Note [Abstract]
Approved quarterly cash dividend (in dollars per share)	$ 0.085
Dividends declared to common shareholders (in dollars per share)		$ 0.085	$ 0.085	$ 0.075
Dividends payable			$ 17.5
Authorized amount of stock repurchase					$ 750.0	$ 250.0
Repurchase and cancellation of common stock (in shares)			1,302,499
Weighted average price of common stock repurchased (in dollars per share)			$ 30.71
Value of repurchased common stock			$ 40.0

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net income attributable to ChampionX	$ 63,532	$ 36,702
Weighted-average number of shares outstanding (in shares)	198,286	203,079
Dilutive effect of stock-based compensation (in shares)	4,154	5,771
Total shares and dilutive securities (in shares)	202,440	208,850
Earnings per share attributable to ChampionX:
Basic (in dollars per share)	$ 0.32	$ 0.18
Diluted (in dollars per share)	$ 0.31	$ 0.18
Number of antidilutive securities excluded (in shares)	600	400

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ACQUISITIONS AND DIVESTITURES - Narrative (Details) - USD ($)			3 Months Ended
	Feb. 23, 2023	Feb. 23, 2022	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Business Acquisition [Line Items]
Goodwill			$ 666,689,000	$ 679,488,000
Disposal Group, Held-for-sale, Not Discontinued Operations | CT Russia Business
Business Acquisition [Line Items]
Recoverable value on divestiture			0
Pre-tax impairment expense			$ 13,000,000
Leak Surveys, Inc.
Business Acquisition [Line Items]
Amount paid for acquisition	$ 500,000	$ 3,200,000
Future payments contingent upon performance		$ 2,500,000
Goodwill					$ 6,300,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Assets
Derivative assets	$ 8,770,000	$ 15,542,000
Liabilities
Derivative liabilities	3,161,000	4,209,000
Carrying Amount	621,875,000	648,438,000
2022 Term Loan Facility | Term Loan Facility
Liabilities
Carrying Amount	621,875,000	623,438,000
Revolving Credit Facility | 2022 Revolving Credit Facility | Credit Facility
Liabilities
Carrying Amount	0	25,000,000
Fair Value	0	25,000,000
Level 2 | 2022 Term Loan Facility | Term Loan Facility
Liabilities
Fair Value	618,766,000	610,969,000
Level 2 | Fair Value, Recurring
Assets
Derivative assets	8,770,000	15,542,000
Liabilities
Derivative liabilities	3,161,000	4,209,000
Foreign currency forward contracts | Level 2 | Fair Value, Recurring
Assets
Derivative assets	3,796,000	7,066,000
Liabilities
Derivative liabilities	3,161,000	4,209,000
Interest rate swaps | Level 2 | Fair Value, Recurring
Assets
Derivative assets	4,974,000	8,476,000
Liabilities
Derivative liabilities	$ 0	$ 0

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DERIVATIVES AND HEDGING TRANSACTIONS - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative Assets
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration]	Prepaid expenses and other current assets	Prepaid expenses and other current assets
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Assets, Noncurrent	Other Assets, Noncurrent
Derivative asset, current	$ 8,367	$ 11,911
Derivative asset, noncurrent	403	3,631
Derivative assets	$ 8,770	$ 15,542
Derivative Liabilities
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities
Derivative liability, current	$ 3,161	$ 4,209
Derivative liabilities	$ 3,161	$ 4,209

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DERIVATIVES AND HEDGING TRANSACTIONS - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Foreign Exchange Forward Contracts and Interest Rate Swap
Derivative [Line Items]
Notional value of foreign currency forward contracts and interest rate swaps	$ 875,633	$ 965,973

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DERIVATIVES AND HEDGING TRANSACTIONS - Schedule of Gain (Loss) on Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total loss of derivative instruments	$ (453)	$ 4,231
Cost of goods and services | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total loss of derivative instruments	(957)	71
Interest expense | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total loss of derivative instruments	(937)	0
Other (income) expense, net | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total loss of derivative instruments	$ 1,441	$ 4,160

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INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory, Net [Abstract]
Raw materials	$ 157,717	$ 142,571
Work in progress	20,615	19,582
Finished goods	501,699	467,628
Subtotal	680,031	629,781
Inventory reserve	(31,801)	(24,702)
LIFO adjustments	(56,442)	(62,536)
Inventories, net	$ 591,788	$ 542,543

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ACCOUNTS RECEIVABLE FACILITY (Details) - Accounts receivable held for sale under Accounts Receivable Facility - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Jun. 28, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum accounts receivable that can be sold		$ 160.0
Accounts receivable sold	$ 165.2
Accounts receivable outstanding	79.4
Loss on sale of trade receivable	$ 1.5

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SUPPLY CHAIN FINANCE (Details) $ in Millions	Mar. 31, 2023 USD ($)
Supply Chain Finance Program
Short-Term Debt [Line Items]
Supply chain finance outstanding	$ 47.0

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CASH FLOW INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental Cash Flow Elements [Abstract]
Transfers from inventory	$ 28.4	$ 12.9